Casino-entertainment giant Caesars has posted net revenue of $2.9 billion for the second quarter of the year, up from the $2.8 billion posted in the same period in the prior year. The latest results were driven by ongoing strong demand in both regional markets and Las Vegas. During the three-month period, the company also recorded a net income of $920 million compared to a net loss of $123 million the prior year.
According to Caesars Chief Executive Officer Tom Reeg, the company hasn’t seen a notable pullback from any customer segments, and future occupancies range from 96% to 98% depending on the property.
During the company’s earnings call, Reeg told investors that there has been “no discernible impact” related to industry watchers’ concerns about a potential recession in the macroeconomy. That steadiness comes ahead of the Formula One Grand Prix in November and Super Bowl LVIII in February 2024, both to be held in Las Vegas.
The CEO said the signs are positive for Nevada’s biggest casino operator. But he does wish Caesars had done a little better at baccarat in June. “We’re in the gambling business,” he said as he discussed a low hold in the game, which tends to attract high-end players. It was one of the only disappointments in the resort giant’s balance sheet.
“It feels really strong out here. Today, volumes are as they’ve been for a year and a half and continue to be very strong,” Reeg said, as reported by Las Vegas Review-Journal. “It’s really hard to tell you anything that would give you a bearish set stance on Vegas.”
CEO Tom Reeg
Revenue from the company’s Las Vegas segment fell 1.2% during the second quarter to roughly $1.13 billion compared to about $1.14 billion during the same time last year. Executives attributed the decline to comparison to strong performance at that time.
As for other financial results, Same-store Adjusted EBITDA reached $1 billion, up from $978 million for the comparable prior-year period; and Same-store Adjusted EBITDA, excluding the Caesars Digital segment, was $996 million versus $1 billion in Q2 2022.
Casino revenue for the quarter reached $1.58 billion, up from $1.54 billion in 2022; while food and beverage revenue was $435 million, up from $422 million the prior year. Meanwhile, hotel revenue was up to $525 million from $519 million in Q2 last year, and other revenue increased to $335 million from $331 million on a yearly basis.
Going forward, the company expects a significant boost from the business generated during F1 and the Super Bowl. It estimates it will receive a 5% lift from hotel rooms alone during the inaugural motorsports race, held November 16-18, with more possibly generated from the casino operations.
Caesars is already talking about 96% to 98% hotel occupancy for the race, and at higher rates. It also expects high-rollers, both international and domestic to return stronger during the upcoming events. The company’s “solid momentum” sets the stage for bigger things to come, Reeg said.
Reeg also updated investors on ongoing labor negotiations with Culinary Union Local 226. The company’s labor contract with the union representing most casino workers expired at the end of May and the business, along with other operators on the Strip, has been running on an extended contract.
Reeg, who previously said frontline workers would get a “significant raise,” said the delayed new contract is due to “complex” negotiations. “You’re talking about complex stuff that takes a little while but I’d expect that we’ll have new agreements by the fall and I’m not expecting a whole lot of drama around them,” he said, as reported by the above-mentioned media.
Caesars Palace Online
Caesars is also positioned to make a splash with Caesars Palace Online, its latest iGaming venture on a platform that Reeg says is “light years” ahead of the old app. Previously, customers had to go through the sports betting app to get to the Internet casino. Compared to the new app, built on the Liberty platform, Reeg sees the old app as “a Commodore 64 computer.”
“Caesars Digital posted its first quarter of positive adjusted EBITDA since our rebranding to Caesars Sportsbook in the third quarter of 2021,” Reeg noted. That amounted to $11 million on $216 in net revenue, which is a big change from past years and could signal profitability on the iGaming front.
Last but not least, the company’s sale of the Rio Las Vegas Hotel Suites takes that property off the ledger in October, which is expected to improve the bottom line for Caesars.
See Caesars’ full Q2 financial report here.
Original article: https://www.yogonet.com/international/noticias/2023/08/02/68153-caesars-posts-29b-in-revenue-in-its-best-q2-yet-expects-significant-boost-from-f1-super-bowl
