Caesars Entertainment is having a busy year. A lot has been changing with the company, and analysts have been eagerly awaiting to see its financial reports for July, August, and September. This week, the reports on Caesars’ third-quarter earnings were finally released!
There’s obviously a lot that is impacting these revenue reports. Today, we’ll look at how the company fared during 2020’s Q3. We’ll also talk about some of Caesars’ plans for the future.
Let’s get into it!
Looking Back at Caesars’ Recent Sales and Purchases
Caesars Entertainment has been one of the biggest, most successful casino companies since the 1950s. Over the past few decades, the company has seen massive dips and surges in revenue. In recent years, the company began experiencing a large downward trend and officials hinted they could be looking at a sale.
In mid-2019, news broke that Eldorado Resorts had agreed to pay $17 billion to acquire Caesars Entertainment. It was the largest casino sale in history. Before the merger could be completed, however, the companies needed to jump through several hoops.
Finally, this summer, the deal was complete. Not long afterward, officials within Caesars announced they had agreed to purchase William Hill. It’s a huge move into the sports betting industry and gives Caesars Entertainment control of the company’s US assets.
Another big move took place in October. Officials at Twin River announced they were taking over Bally’s brand from Caesars Entertainment. This gives the company permission to rebrand nearly all of its properties with the Bally’s name.
It’s been a fascinating year for this company. Casino revenue has been extremely low, yet officials here still seemed determined to expand. Now, we’re finally hearing more about Caesars’ revenue figures for the year’s third quarter.
Here’s where things stand.
Here’s What Caesars’ Third-Quarter Earnings Reports Say
As most are already aware, all major US casino companies have seen sharp declines in their quarterly earnings reports this year. Some are faring better than others, yet it could take years before things get back to pre-pandemic levels. Today, Caesars Entertainment finally released its reports on Q3’s revenue.
According to these reports, the company managed to bring in $1.4 billion in net revenue over the year’s third quarter. This represents a solid 52% increase on a GAAP basis. Unfortunately, it’s a 34% decrease in year-on-year net revenue.
As we just detailed, these months were extremely busy for the company. CEO Tom Reeg spoke about these new reports to the media this week.
“Our third quarter was a busy period for the company. We officially closed our merger with Former Caesars on July 20, 2020,” Reeg said. “We announced a recommended offer to acquire William Hill plc on September 30, 2020 and successfully raised $1.9 billion of new equity that closed on October 1, 2020. Additionally, 55 out of our 56 properties have now reopened and operating results continue to improve sequentially. Regional markets continued to outperform destination markets and we remain optimistic regarding an eventual recovery of travel and tourism in the U.S. and especially in Las Vegas.”
Certain parts of the company fared better than others. Operations in Las Vegas saw a revenue loss of 60% during 2020’s Q3.
Most expect things to improve in 2021. Caesars’ acquisition of William Hill is almost guaranteed to help the company bring in more money. We’ll continue offering updates on Caesars’ plans over the next few months.
How Are Things in Las Vegas Right Now?
When most people think of US casino destinations, Las Vegas comes to mind. This city remains the biggest gambling destination in the country. A huge number of incredible casino-resorts are operating here and all are working hard to bring in more players.
Things haven’t been easy for the city and state of Nevada. While revenue seems to be increasing, it’s still low year-on-year. Hotels are operating at a limited capacity. Some have been forced to limit their operating hours out of health concerns.
The casino companies are still struggling. Wynn Resorts and Las Vegas Sands are seeing record-low revenue figures. The latter recently announced that it’s interested in selling some of its major US properties.
Caesars Entertainment, however, seems optimistic about the future. The aforementioned Tom Reeg touts high hotel occupancy as a sign that things are improving. He’s confident that things will be better than ever once the Covid-19 pandemic has come to an end.
“When we get into a post-COVID world, the pent-up demand you are going to see for gaming in general and Las Vegas in particular is going to be beyond your wildest dreams. The flow-through you are going to see in the sector is unlike anything that will happen historically in this space,” Reeg said to the media.
Are you surprised at Caesars’ third-quarter earnings? When do you expect Las Vegas to return to normal? Let us know in the comments section below!