Caesars Q2 Revenue Climbs As Sports Betting, Strip Food And Beverage Offset Weak Vegas Table Volumes
Posted on: August 5, 2019, 02:36h.
Last updated on: August 5, 2019, 03:14h.
Caesars Entertainment Corp. (NASDAQ: CZR) said its second-quarter revenue rose almost five percent to $2.22 billion, beating Wall Street’s forecast by $10 million, on the back of expanded sports betting offerings at its regional properties and strong hotel and food and beverage revenue in Las Vegas.
The company, which is the target of a $17.3 billion takeover by Eldorado Resorts, Inc. (NASDAQ: ERI), said Las Vegas hotel cash revenue climbed 6.3 percent in the April through June period, as revenue per available room, or RevPAR, jumped 6.2 percent.
Increased occupancy at Caesars Palace, the company’s flagship Strip property, boosted food and beverage sales there, offsetting a weak gaming hold and slack table game volumes, excluding baccarat, according to the company.
Caesars’ Sin City venues, which also include Bally’s, the Flamingo, and Paris, combined for second-quarter revenue of $1.002 billion, up from $992 million a year earlier. Ex-Las Vegas properties had June quarter turnover of $1.064 billion, up from $982 million.
Our Las Vegas performance was the result of strong group and leisure demand, which produced an all-time quarterly record for hotel cash revenue and occupancy for the second consecutive quarter,” said Caesars CEO Tony Rodio in a statement.
Rodio acknowledged “competitive pressures” in Atlantic City, where Caesars operates three casinos, similar headwinds in other markets outside Las Vegas, and the disappointing hold at Caesars Palace were the primary factors weighing on the second-quarter results.
Sport Betting Boost
While Caesars did not break out precise sports betting figures for the quarter, the company did say continued proliferation of legal sports wagering in the Mid-Atlantic and Midwest regions contributed to the revenue beat.
The company cited Indiana, where it is working on several new sportsbooks, and New York, among others, as markets where it expects sports betting growth. Caesars completed two retail sportsbooks in the Empire State for the Oneida Nation in the second quarter, the company said.
“In the Midwest, the company is currently designing seven sports books across its Indiana properties, and will look to add new sports books in both Illinois and Iowa,” according to the statement. “Caesars opened two sports books for the Oneida Indian Nation in New York. The company also opened a sports book in Pennsylvania.”
Caesars operates properties in 14 states, of which nine have already legalized sports wagering or recently signed off on it.
Not Much Takeover Talk
There was not much in the way of comments about the proposed Eldorado Resorts takeover, nor did Caesars executives saying anything about the possibility of asset sales on the Strip or elsewhere.
With the Eldorado takeover moving forward, “I remain focused on improving the company’s operations and financial profile through incremental revenue opportunities and operating efficiencies,” said Rodio in the statement.
The combined company will assume the Caesars name when the deal is completed in the first half of next year, but Eldorado management will be running the show, leaving Rodio’s fate up in the air for the time being.
Eldorado reports second-quarter results on Tuesday, Aug. 6 before the open of US markets.
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