Caesars Earnings Flat but New Paris Las Vegas Rooms Should Boost Second Half

Caesars CEO Tom Reeg says the company is seeing record hotel occupancy and non-gaming revenue. (Image: courtesy of CNBC)

Quarterly financials for Caesars Entertainment show the casino giant still trying to find its groove

This week Caesars Entertainment posted earnings for the second quarter. Revenue was down just a smidge from last year.

The company saw revenues of $2.8 billion from April through June. This was down slightly from the second quarter of last year when Caesars reported $2.9 billion in revenue.

In Las Vegas, Caesars reported a slight dip in revenue from $1.13 billion a year ago to $1.10 billion for the second quarter of 2024.

The $514 million in EBITDA for Caesars Las Vegas properties was 1.2% higher than the $512 million reported during the second quarter last year.

Caesars CEO Tom Reeg noted this was a strong quarter for Las Vegas overall, highlighting “year-over- year growth in Adjusted EBITDA” in Las Vegas “driven by record same-store revenues, hotel occupancy, and Average Daily Rate (ADR).”

Overall, Caesars’ net revenue in Las Vegas grew 1.9% compared to the second quarter.

Caesars President and COO Anthony Carano said the company had record revenue from its food and beverage division in Las Vegas. He and Reeg noted the recent closure of The Mirage should boost room reservations during the second half of the year, with the center-Strip property’s 3,000 rooms suddenly off the market.

Looking forward, Reeg sees strong third and fourth quarters for the company saying during the earnings call, “there's just a massive amount of demand for Vegas.”

Paris Versaille Tower Already Boosting Revenue

Last year, Caesars announced it was transforming the Jubilee Tower at Horseshoe into the Versailles Tower at Paris Las Vegas. In addition to renovating the hotel rooms, the company would connect to the tower with a bridge since it’s still technically part of Horseshoe.

The idea behind the change was that room rates would spike simply by carrying the “Paris” name. Caesars reports that room rates in the Versailles Tower as of the second quarter were $65 higher per night than a year ago when it was under the Horseshoe brand.

This is just the beginning of higher revenue from the Versailles Tower inside Paris Las Vegas. The increase doesn’t include the Versailles Balcony rooms that opened this quarter.

The rate for these 38 rooms is at least $100 more per night than the highest base room at the property.

Their selling point is the unobstructed view of the Vegas Strip and Bellagio fountains.

While the view is great,the balcony itself is small. The Paris balcony is just 55 square feet. For reference, that’s a little larger than a King mattress and four times the size of a bath towel.

The balcony is half the size of a typical 110-square-foot balcony at The Cosmopolitan. Unlike the Cosmopolitan the Paris balconies don’t have a couch, chair, or end tables to relax outside and enjoy the view. That said, the view is gorgeous and guests can probably just swing a chair from the room to enjoy it.

Best WSOP of All Time for Caesars

The World Series Of Poker (WSOP) isn’t a big money maker for Caesars. It’s not even listed as a revenue source in Caesars' accounting. WSOP is considered “other” revenue.

Having said that, like sportsbooks, WSOP positively impacts other parts of Caesars' revenue. During the call, Reeg said:

“This was our best World Series ever from a financial perspective. It fills a lot of rooms on the east side of the strip at a time when it can be, as we've noticed recently, almost 120 degrees here, so a good time to have a significant group of gamblers in-house. We see benefits in our hotel. We see benefits in table games. We see benefits in slot play and in our food and beverage that's all ancillary.”

While the WSOP is a boost for Caesars’ land-based properties in Las Vegas, that not the case with WSOP online.

The online poker website is available in fewer than 10 states and has little impact on the bottom line. Eric Hession President, Caesars Sports and Online Gaming added:

“The online poker does okay, but doesn't make a huge amount of money.”

Rumors Are Rumors Until They’re Not

Caesars could eventually sell some non-essential Las Vegas assets but there’s nothing in the pipeline despite shareholders asking the company to make a move. Reeg says this is still a possibility.

He says the company has “non-core, non-operating casino assets in (Caesars) portfolio” that could attract a good price. Reeg also reiterated that there is no plan to sell any casinos in Las Vegas.

On the acquisition front, Reeg says the company is “not even tangentially involved” in the possibility of buying Penn Entertainment and its casinos.

Any acquisition would be to help increase Caesars’ stock price. Reeg says the company will likely buy back shares to increase price instead of buying more casinos.

The bottom line as of July 30 is that Caesars has no plans to buy or sell any casinos in Las Vegas or around the country. It also sounds like they’re waiting on a buyer to come up with a strong offer to buy its Las Vegas assets that aren’t casinos.