Caesars maintains Las Vegas sale expectation amid digital growth hopes


Caesars Entertainment has maintained its Las Vegas divestment ambitions, the process for which was launched in early 2022, as the operator voices further optimism regarding the North American digital space.

The casino and entertainment operator asserts that “you should expect that that remains the case” regarding a Vegas strip asset sale, adding that “the next time we talk to you” regarding such a move “will be to announce that sale”.

Funds gathered from the expected disposal will be utilised to scale digital investments, as well as drive an array of development projects in a bid “to generate significant returns in the business”.

Caesars’ expansion plans currently total an accumulative capital investment of $1.3bn, and includes construction work in New Orleans, Indiana, and Pompano. 

Furthermore, construction of a land-based project in Lake Charles is said to be making “great progress”, with ground breaking of a Harris Hossier Park venue anticipated, and development in Columbus, Nebraska slated for later this year. The group adds that it is also “actively moving forward” with a $400m Atlantic City capital plan.

The comments come as Caesars reports a 38.8 per cent Q4 revenue increase to $2.59bn (2020: $1.59bn), which drove the group to a year-long 2021 total of $9.75bn (2020: $3.6bn).

Las Vegas, hampered by comparative COVID-19 shutdowns or mandated restrictions, saw Q4 and FY revenue reach $1.04n (2020: 447m) and $3.4bn (2020: $751m), respectively.

Anthony Carano, Caesars’ President and Chief Operating Officer, noted that “demand trends remained strong” throughout Q4, in addition to suggesting that the company “remain encouraged” thus far through 2022.

Revenue in the group’s regional markets increased to $1.36bn (2020: $1.02bn) and $5.61bn (2020: $2.66bn) for Q4 and FY, with it noted that “operating results remained strong, especially in markets not impacted by COVID restrictions, construction disruption or property closures”.

Group-wide net loss through Q4 and FY narrowed to $434m (2020: $555m) and $1.09bn (2020: $1.75bn), respectively, with adjusted EBITDA increasing to $581m (2020: $329m) and $2.99bn (2020: $794m).

“Our quarterly operating results reflect new fourth quarter records for adjusted EBITDA and adjusted EBITDA margin in both our Las Vegas and regional segments,” Carano stated. 

“Caesars Sportsbook continues to exceed our expectations for new customer registrations, deposits and market share, especially in recently launched jurisdictions.”

Across the group’s Caesars Digital segment Q4 revenue generated $116m (2020: $37m) of net revenue and an adjusted EBITDA loss of $305m (2020: $6m), with its full-year performance closing at $472m (2020: $95m) and -$476m (2020: $26m), respectively.

Through the quarter volume across sports betting and igaming was split 65 per cent and 35 per cent, with customer acquisition and handle exceeding expectations.

However, net revenue was “negatively impacted by promotional investment in odds and profit boost competitive pricing strategies and lower than historical hold in certain markets”.

Furthermore, Caesars also elaborates on previously expressed expectations that the digital segment would help drive incremental value across brick-and-mortar casinos, with Carano commenting that “we’re on a run rate of over $150m of gaming revenue annually out of digital into brick-and-mortar. That’s extremely high volume – high flow-through revenue.”

Adding that, despite investor struggles and stating that “we’ve gone from kind of ever increasing bullishness to unlimited bearishness at this point,” Caesars sees this as “the most exciting growth opportunity this space has seen in three decades”.