Caesars Won’t Sell Strip Casino This Year, Rumor Mill Begs to Differ

Posted on: May 4, 2021, 10:24h. 

Last updated on: June 3, 2021, 03:06h.

Caesars Entertainment (NASDAQ:CZR) reported solid first-quarter results Tuesday, while noting weekends at its Las Vegas venues “are sold out for the foreseeable future,” in the words of CEO Tom Reeg. But the operator won’t be unloading any of its Sin City properties this year.

Caesars Las Vegas
Caesars CEO Tom Reeg in a CNBC interview last month. He says the company won’t sell a Las Vegas asset until 2022. (Image: CNBC)

The largest domestic gaming company by number of properties posted earnings before interest, taxes, depreciation and amortization (EBITDA) of $505 million in the first three months of the year. Reeg added it’s probable the Flamingo operator earns at least $1 billion in one of this year’s four quarters.

However, Caesars won’t join the growing list of recent Las Vegas casino sales, including the Palms and the Tropicana.

We remain convinced that it does not make sense for us to market an asset until we can market it off the cash flow that we’re doing with it, not a bridge to what we think we can do with it,” said Reeg on a conference call with analysts. “So that suggests it’s a 2022 event from a marketing and sale exercise that closes after licensing post.”

One asset that the company did confirm is for sale is William Hill’s UK betting shops and its European online casinos and sports wagering business. CFO Bret Yunker said the company plans to reduce debt by $2 billion over the next year, assuming a “conservative” sale price for the William Hill assets. Caesars expects to announce a buyer in the third or fourth quarter.

Caesars Las Vegas Rumors Going Strong

The idea of Caesars parting with one or two Strip assets dates back nearly two years, when Eldorado Resorts announced plans to acquire “old Caesars.” It revealed that it could sell one or two Las Vegas casinos within 12 or 18 months of that transaction closing.

The marriage was consummated last July during the coroanvirus pandemic, which is depressing gaming property values. Of the Las Vegas venues that changed hands this year, only the Venetian and Sands Expo and Convention Center sold at anything resembling premium pricing.

That’s not preventing the rumor mill from spinning. A source requesting anonymity tells Paris Las Vegas and Planet Hollywood Resort & Casino could already be up for sale. Reeg disagrees.

“And I should say, I’ve read a number of more rumors, different flavor this quarter. There are no active discussions on any Las Vegas asset as I sit here today,” said the Caesars CEO on the call.

Something to the Chatter

It’s not a stretch to assume that when it decides to sell Strip asset or assets, Caesars could part with Paris and Planet Hollywood.

When Eldorado moved on Caesars in 2019, it struck an agreement with VICI Properties (NYSE:VICI) for rights of first refusal on one of Flamingo Las Vegas, Bally’s Las Vegas, Paris, and Planet Hollywood. Should a deal for one of those venues be reached, LINQ Hotel & Casino would be added to the remaining group for a possible second transaction.

A rumor about Planet Hollywood being on the auction block surfaced in February, but related talk has since been quiet.