Caesars Earnings Down, WSOP Sale Finalized, Linq Promenade Next on the Block

An estimated 20.4 million tourists visit the Linq Promenade every year, so naturally, Caesars wants to get rid of it. (Image: courtesy of Caesars Entertainment)

It was a busy week for Caesars. On Tuesday’s third quarter earnings call, the company announced it was selling the Linq Promenade in Las Vegas, and that it closed on the sale of WSOP.

The Las Vegas-based gaming giant also reported a net loss of $9 million for Q3 2024. This is a big reversal from last year when the company reported a net income of $74 million.

Total revenue for the quarter was $2.9 billion. This was down 2.6% compared to last year.

This negative quarter impacted all segments of Caesars’ except for digital which includes online casinos and sports betting. Shares of Caesars ($CZR) fell more than 8% in early trading on the stock market on Wednesday.

In an effort to pay down debt, and add some positivity to its earnings, the two deals announced by Caesars will eventually generate a total of $775 million. Some will arrive soon and the rest over the next few years.

The company didn’t offer much to look forward to in Las Vegas besides the opening of a couple of restaurants that have been delayed.

Quick Spins:

• Caesars reported a net loss for the third quarter.
• The company announced it will sell The Linq Promenade
• The sale of WSOP closed this week
• Las Vegas Grand Prix revenue will be flat or down slightly

Caesars Plans to Sell the Linq Promenade (Not the Casino)

Just before Tuesday’s earnings call (literally two minutes), Caesars announced it was selling The Linq Promenade to a joint venture to be formed between TPG Real Estate and the Investment company of Acadia Realty Trust for $275 million. The company expects the sale to close before the year is over.

Caesars spent $550 million to build The Linq in 2011.

The sale is just for the shopping area between The Linq casino and Flamingo. Caesars will continue to operate the High Roller Observation Wheel inside The Linq Promenade and the casino with the same name.

“The sale of the LINQ Promenade represents an accretive, non-core asset sale that will accelerate our debt reduction goals,” Caesars Entertainment CEO Tom Reeg explained.

He went on to say during the call that the company is discussing possibly selling more non-core assets.

More Las Vegas Assets on the Block?

He didn’t mention specifics or a timeline on when more sales could take place. 

Non-core assets are owned by a company but considered non-essential to its operations. The Linq Promenade is essentially a mall. Caesars is not a mall operator. For reference, the Caesars Forum Shops at Caesars Palace is operated by Simon Property Group, a company that operates malls all over the US.

Caesars owns 26 acres of unused land behind Horseshoe and Paris Las Vegas that also could be attractive for a variety of buyers. The Caesars Forum convention center behind The Linq Hotel and Casino could be considered a non-core asset as well.

It’s less likely the company wouldn't want to sell the convention center. These visitors bring higher room rates and more spending to its properties. During the earnings call, Reeg mentioned that group/convention bookings are up this year and should be up again next year.

WSOP Sale Closed

Earlier this year Caesars announced it was selling the WSOP brand for $500 million. The deal received the appropriate regulatory approvals and was officially completed on Tuesday.

The deal is for $250 million in cash and a $250 million promissory note that is due “five years after the transaction’s closing secured by the WSOP intellectual property assets being sold.”

Caesars will continue to host WSOP in its Las Vegas casinos for the next 20 years. The poker rooms inside Caesars properties will continue to use the WSOP brand name. Additionally, these poker rooms will “continue to enjoy preferential rights to host live WSOP Circuit events going forward.”

Caesars currently operates only one -- inside Horseshoe. Reeg did not mention reopening the closed Caesars Palace poker room during the earnings call.

Soft Openings

During the call, Reeg said that Pinky’s By Vanderpump at Flamingo should open in a couple of weeks. The restaurant was supposed to open this summer. He also said the Flamingo outlet of Gordon Ramsay Burger, also delayed, will open soon.

The renovated high-limit slots room at Caesars Palace should open in a few weeks. The upgraded table games room should follow shortly after.

Caesars will have money on hand to do maintenance updates next year but the company didn’t share plans.

4th Quarter Comeback?

Despite lower revenue and profit in Las Vegas, Caesars somehow had a good quarter. According to President and Chief Operating Officer Anthony Carano.

“Las Vegas segment results were driven by another record performance in hotel and F&B (food and beverage) cash revenue,” Carano said, “driven by strong ADRs and occupancy of 97.1%.”

That sounds great but Caesars Las Vegas revenue was down 1.3% for the quarter to $1.06 billion. Profit was down 5% to $226 million.

“Our slot handle was flat, but it was table-hold that was the laggard,” Reeg explained. He mentioned that a handful of large players moved their trips from the third quarter to other parts of the calendar.

Looking forward, Reeg expects to see a solid fourth quarter with the addition of the Versailles Tower and its balcony rooms at Paris Las Vegas for the first time.

He noted that the company saw a lift in revenue of about $17 million from the Las Vegas Grand Prix last year. He expects that to be flat to down a little depending on the table game hold. The international high rollers who visit for the F1 race tend to play table games instead of slot machines.