A lot has been happening lately with gambling and hospitality giant Caesars Entertainment.
The company has been struggling since the beginning of 2024 with debt and liability.
Negotiations with the Culinary Union and other organized labour groups also had a negative impact on the casino operator.
Like the rest of Vegas, Caesars was hoping to start 2024 with a bang, with the Las Vegas Grand Prix that took off on November 18, 2023. It was predicted that the motorsport event would generate 7,700 jobs and $1.2 billion over the year for the local economy.
But things didn’t exactly go to plan for Ceasers Entertainment with the F1 motor racing extravaganza. According to analyst John DeCree, of CBRE Capital Advisors, the crowd that travelled to Las Vegas to see the F1 races wasn’t the target audience of the Caesars’ properties on the Vegas Strip (where the races took place).
While some high rollers would go to Caesars Palace while they are in town for the F1 event, they wouldn’t visit other company properties on the strip like the Flamingo, Harrah’s and Horseshoe.
Instead, many went to properties of the same mid-price tier, like the Aria, Bellagio, and Cosmopolitan, which are owned by competitor MGM Resorts International.
- In Q4/23, Caesars earned $2.83 billion and generated a net loss of $72 million.
- In the Year 2023, Caesars earned $11.5 billion and a net income of $786 million.
- Revenues from Las Vegas for 2023 were $4.47 billion.
- By the end of 2023, outstanding liabilities were $12.4 billion.
- Currently, Ceasars’ stock is down 16.2% year-to-date.
- Caesars forecasted revenues of $25 million from the F1.
The Formula One event didn’t bring in profits as planned, but Caesars’ was looking to bank on other business ventures, with the company pushing stronger into iGaming. In February, it bought the Michigan iGaming rights from Wynn Resorts for an undisclosed sum.
Ziv Chen, a contributing writer to thesolitaire.com, said, “Although it’s still small figures compared to the revenues these hospitality giants generate from their land-based properties, online and mobile gambling is growing at an exponential rate.
“Take Caesars Entertainment as an example. Caesars Digital, the company’s remote gambling arm, generated net revenues of $548 and $973 million in 2022 and 2023, respectively.
“There is still a lot more to do in terms of growth and efficiency, but this is the wave of the future.”
The company is also looking to generate more cash flow from its land-based revenue sources like its new Casino in Danville, Virginia, and the rebranding of Harrah’s New Orleans to Caesars Palace, which is supposed to bring more high-rollers and money-spending guests.
According to the company’s CEO, Tom Reeg, the rebranding is already paying dividends, with a 50% year-on-year growth in revenues, with February revenues standing at $40 million.
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