Caesars won’t sell off Strip resort after all, says CEO

Caesars Entertainment Inc. will keep its Las Vegas portfolio intact, executives said Tuesday, following a year of signaling to investors plans of possibly selling off a Strip resort.

CEO Tom Reeg announced the decision to not pursue a sale during the company’s third-quarter earnings call. He said the market wasn’t favorable and the cash flow of the asset considered for sale continued to increase. The company never publicly specified which property it would sell off.

“Despite us talking about how this was a discretionary process for us, it created an unnecessary overhang in the stock,” he said and apologized to shareholders.

Caesars Entertainment improved its third-quarter revenue when compared to the same time a year earlier.

For the quarter that ended Sept. 30, Caesars Entertainment reported net income of $52 million, or $0.24 per share, on revenue of $2.89 billion. During the same period last year, it reported a net loss of $233 million, or $1.10 per share, on revenues of $2.69 billion.

Revenue for the Las Vegas segment grew 5.9 percent from the same period in 2021 to $1.08 billion.

Mobile sportsbook shows improvement

Caesars Digital, the company’s mobile sports betting business, increased its revenue by 120.8 percent to $212 million. The segment improved its losses, reporting $63 million in net losses compared to $190 million in the same period last year.

Analysts on the call were encouraged by the change, given the sports betting division’s history of losses while the industry at large struggles to establish a sustainable financial model.

Reeg said the division was cash flow positive in October and could be a positive contributor for the fourth quarter overall.

Part of what will help the segment become profitable in the future, Reeg said, will be growth in iCasino and the expiration of partnership deals that started at the launch of legalized sports betting in new jurisdictions. Those three- to five-year deals cost the company about $200 million in annual expenses, he said. Some will end and others could cost less upon renewal.

Strip properties keeping busy

Reeg said the company’s nine properties on and near the Strip saw a return to normal. October — which was not included in the quarterly report — was the strongest month in Caesars’ Las Vegas history, he said.

“We’re certainly cognizant of what’s out there (in macroeconomics),” Reeg said. “I can’t point you to anything in our business, in or out of Vegas, that shows any slowdown in the consumer. So, we feel very good.”

International visitors, however, have been slower to return than the domestic customer. Executives said they hope to see more visitors during Lunar New Year, when many Asian customers may be open to traveling to celebrate the start of the Chinese lunar calendar. They also said Adele’s residency at the Colosseum at Caesars Palace, beginning Nov. 18, will appeal to the “international high-end clientele.”

Still, Reeg acknowledged that visitation has been damaged after more than two years of the pandemic.

“They obviously found other places to play, and it’s going to be a long road to build back,” he said.

Caesars shares, traded on the Nasdaq, rose 1.51 percent to close at $44.39 on Tuesday. After hours, shares rose 6.33 percent to $47.20.

McKenna Ross is a corps member with Report for America, a national service program that places journalists into local newsrooms. Contact her at mross@reviewjournal.com. Follow @mckenna_ross_ on Twitter.