LAS VEGAS (KLAS) — Caesars Entertainment sees Formula One up ahead, and it’s revving its engines just thinking about the opportunity.
Caesars Chief Executive Officer Tom Reeg said he thinks it will mean a 5% boost in business, and that’s not even what happens at the casino tables. It’s an exciting prospect for a company that’s ready to mash the accelerator going into the last half of 2023.
In a second-quarter (Q2) earnings call with investors, Reeg said the signs are positive for Nevada’s biggest casino operator. But he does wish Caesars had done a little better at baccarat in June. “We’re in the gambling business,” he said as he discussed a low hold in the game that tends to attract high-end players. It was one of the only disappointments in the resort giant’s balance sheet.
Caesars pulled in $2.9 billion in revenue, an improvement over the previous June — which was the best Q2 in Caesars history. That produced a profit of $1 billion — more than the $978 million in Q2 2022.
Caesars expresses profit as EBITDA, or earnings before interest, taxes, depreciation and amortization.
“The second quarter of 2023 reflected continued strength in our business. Demand remains strong in both Las Vegas and our regional markets,” Reeg said.
The company’s “solid momentum” sets the stage for bigger things to come, Reeg said. The F1 race and the Super Bowl are opportunities everyone wants to cash in on, but Caesars is already talking about 96% to 98% hotel occupancy for the event — and at higher rates, as Las Vegas is already aware. A year ahead of the event, 8 News Now found hotel rooms at three times the normal price.
Ongoing negotiations over union contracts don’t concern Reeg. “I’d expect that we’ll have new agreements by the fall and I’m not expecting a whole lot of drama around them,” he said.
Caesars is also positioned to make a splash with Caesars Palace Online, the iGaming venture on a platform that Reeg says is “light years” ahead of the old app. Previously, customers had to go through the sports betting app to get to the internet casino.
Compared to the new app, built on the Liberty platform, Reeg sees the old app as “a Commodore 64 computer.”
“Caesars Digital posted its first quarter of positive adjusted EBITDA since our rebranding to Caesars Sportsbook in the third quarter of 2021,” Reeg said. That amounted to $11 million on $216 in net revenue, which is a big change from past years and could signal profitability on the iGaming front.
The company’s sale of the Rio Las Vegas Hotel Suites takes that property off the ledger in October, and that will improve the bottom line for Caesars.