Following the William Hill acquisition Caesars has rebranded its sports betting operations and launched a new marketing campaign, while CEO Tom Reeg said it will likely sell one of its its eight Las Vegas Strip properties in 2022.
Caesars Entertainment executives marked a quarterly EBITDA record for the company, as it returned to profit for the first time since the start of the pandemic.
The company reported net income of $71m for Q2 2021, following a net loss of $423m in the previous quarter. Caesars posted $2.5bn in net revenue for the quarter which ended 30 June, compared to $127m for the same period in 2020 as businesses worldwide were forced to close their doors due to the coronavirus pandemic.
“There could be bumps along the way in terms of masks and protocols that we have to follow, but the demand is exceedingly strong and has continued to build. So, we feel good about where we are in the bricks-and-mortar business,” said Caesars Entertainment CEO Tom Reeg speaking during the company’s quarterly earnings call.
Caesars’ Las Vegas occupancy for Q2 was 89 percent, with occupancy reaching 99 percent during weekends. By comparison, for the first three months of the year, the company reported 63 percent occupancy in Las Vegas, with 85 percent occupancy on weekends.
“We fully expect to remain in the low to mid-90s of occupancy in Vegas through this current situation with the Delta variant,” Reeg added.
Caesars reported same store adjusted EBITDA of $1bn, a quarterly record for the company. “When I spoke last quarter and threw out that I’d expect us to hit $1bn in EBITDA in a quarter in 2021, I wasn’t thinking it was going to be second quarter. I was actually thinking it would be [Q3]. So we’re a little bit ahead of schedule,” Reeg stated.
Nevada introduced an indoor mask mandate regardless of vaccination status at the end of July for areas experiencing high numbers of COVID-19 cases. The measure applies to Clark County, where the Las Vegas Strip is located.
Nevertheless, Reeg stated the impact of the new measure is not as significant as earlier restrictions and suggested the recovery will continue during the coming months. “What’s going on with the mask mandate is far less onerous than the restrictions we dealt with in the last quarter,” Reeg said.
Caesars’ Las Vegas properties generated $855m in net revenue for Q2, with the company’s regional properties bringing in $1.5bn, and its managed and international properties $66m. Caesars Digital - the company’s new reporting segment which includes sports betting, igaming and poker - accounted for $86m, while corporate and other revenue streams generated $5m.
In “Las Vegas, demand trends accelerated meaningfully versus Q1. We generated $423m of adjusted EBITDA in the quarter,” said Anthony Carano, Caesars’ president and COO. “Turning to our regional markets, operating results improved significantly versus Q2 of 2019 with EBITDA growth of 56 percent, excluding Lake Charles, which remains closed.
“On a same-store sales basis, we achieved the highest EBITDA and EBITDA margin in the regional segment in the history of the company. 26 regional properties set all-time quarterly EBITDA records with 31 properties setting all-time EBITDA margin records during the quarter,” he added.
With the William Hill acquisition now closed, the company has officially rebranded its sports betting operations to Caesars and launched a new marketing campaign at the start of August. The company currently operates sportsbooks in 17 states and Washington, D.C., 13 of which offer mobile sports betting.
“So what you’re going to see is us leaning the entire organisation into this vertical. Connecting to Caesars Rewards more than 60 million people, …[the] ability to earn and use points on or offline. We’re activating our player development teams across the organisation to sign up new accounts,” Carano explained. “We’re activating our entire workforce. Our frontline labour force will each have their own individual QR code, and will be able to sign up customers and be incentivised to help us do that.”
Reeg said that the company still intends to sell one of its eight Las Vegas Strip properties, a move that has been planned since Caesars Entrainment merged with Eldorado Resorts. “Nothing has changed there,” Reeg said. “We still expect to sell a Vegas Strip asset, and I would expect that sale to take place in 2022.”
