Operator News

US – Caesars sees 35 casinos set records for Q4 EBITDA margin

By Phil - 23 February 2022

Caesars Entertainment has reported revenues of revenues of $9.6bn in 2021, up from $3.6bn in 2020, with 31 of the company’s 52 properties setting a record for the highest fourth quarter EBITDA, while 35 set a record for the highest Q4 EBITDA margin.

In Las Vegas, demand trends remained strong throughout the quarter, leading to an all-time fourth quarter record of $494m in adjusted EBITDA, excluding real rent payments. EBITDA improved 33 per cent versus the fourth quarter of 2019 and margins improved 1,000 basis points to 48 per cent. Total occupancy for Q4 was 86 per cent with weekend occupancy at 94 per cent and midweek occupancy at 83 per cent.

The fourth quarter produced net revenues of $2.6bn versus $1.6bn for the comparable prior-year period. The year produced a net loss of $1bn compared to a net loss of $1.8bn for the comparable prior-year period.

Adjusted EBITDA in the quarter, excluding Caesars Digital was $886m, up 30 per cent versus Q4 of ’19 on a same-store basis. Operating results reflect new fourth quarter records for adjusted EBITDA and adjusted EBITDA margin in both our Las Vegas and Regional segments.

Caesars Entertainment has exceeded its stated synergy target from its July 2020 merger with Eldorado Resorts. Caesars Sportsbook is currently live in 22 states and jurisdictions, 16 of which offer mobile wagering.

Tom Reeg, Chief Executive Officer of Caesars Entertainment, said: “Our quarterly operating results reflect new fourth quarter records for Adjusted EBITDA and Adjusted EBITDA margin in both our Las Vegas and Regional segments. Caesars Sportsbook continues to exceed our expectations for new customer registrations, deposits and market share, especially in recently launched jurisdictions.”

“Despite an increase in COVID-19 cases in late December and into January, we remain encouraged by booking trends into 2022 and beyond. While group attrition remains elevated, we began to see conventions return to Las Vegas in the back half of ’21, and the segment represented approximately 10 per cent of occupied room nights, a dramatic improvement versus the first half of ’21. In Q4 ’21, we booked a record $160m of new business in the group segment company-wide.

“Turning to our Regional markets, operating results remained strong, especially in markets not impacted by COVID restrictions, construction disruption or property closures. Adjusted EBITDA, excluding New Orleans, Caesars Atlantic City and Lake Charles increased 28% versus 2019, with margins improving by 750 bps to 34 per cent. On a same-store sales basis, we achieved the highest fourth quarter EBITDA and EBITDA margin in the Regional segment in the history of the company.”

“In our Caesars Digital segment in Q4, we generated $116m of net revenue and an adjusted EBITDA loss of $305m. Sports betting and iCasino volume was split roughly 65 per cent and 35 per cent. Approximately 90 per cent of our handle was from mobile sports betting and iCasino. We remain focused on scaling our Digital business through customer acquisition during our first fall sports seasons post launch of our Caesars branded apps in 11 states.

“Similar to Q3, while customer acquisition and handle exceeded our internal expectations, net revenues were negatively impacted by promotional investment in odds and profit boost competitive pricing strategies and lower than historical hold in certain markets. Following the launch of mobile sports betting in Louisiana on January 28 and retail sports betting in Washington State on February 10, we now offer sports betting in 22 domestic states and jurisdictions, 16 of which offer mobile wagering,” Mr Reeg added.

“During the fourth quarter and into early 2022, we have rolled out enhanced iCasino offerings, including significant increases in new game content. Customer response to our new game portfolio has been encouraging. We look forward to additional improvements in our offering throughout 2022.”

“Construction of our land-based project in Lake Charles is making great progress and remains on schedule for a Q4 opening this year. In New Orleans, construction work continues on our new hotel tower and property upgrades. In Las Vegas, we are excited to announce that we have reopened the dramatically upgraded arrival experience at Caesars Palace.

In Pompano, work has started on the new parking garage and casino expansion, which should be complete by year-end. In Indiana, the expansion of Caesar’s recently rebranded Horseshoe Indianapolis property is now complete, and we expect additional gaming and F&B amenities by the middle of the year.

“We also anticipate breaking ground on our expansion plans for Harris Hoosier Park in the second quarter of this year. Construction is slated to begin on our Columbus, Nebraska project later this year,” Mr Reeg added. “And finally, in Atlantic City, our $400m capital plan is actively moving forward with remodeling room towers and setting the stage for exciting new food and beverage and entertainment options in 2022.”