Caesars Entertainment reported a decline in revenue and adjusted earnings in Las Vegas during the fourth quarter, but a strong showing in its digital segment helped overall earnings during the final three months of 2023.
Caesars released its fourth-quarter earnings report Tuesday that showed its Las Vegas properties generated $1.09 billion in revenue in the fourth quarter, down from $1.15 billion in fourth-quarter 2022.
Adjusted earnings for Las Vegas came in at $489 million, down from $537 million in Q4 2022.
Regional properties reported revenue of $1.36 billion in the fourth quarter as compared to $1.35 billion last year.
Regional adjusted earnings fell to $431 million, down from $443 million.
Digital had a strong showing with $304 million in revenue, up from $237 million year over year. Adjusted earnings came in at $29 million, up from a loss of $5 million during fourth-quarter 2022.
Companywide for the fourth quarter, revenue was $2.82 billion, the same as 2022. Adjusted earnings were $930 million, down from $957 million.
For the year, net revenues were $11.5 billion, up from $11.3 billion in 2022. Adjusted earnings were $3.93 billion, up from $3.92 billion.
“We’re very pleased with 2023,” said CEO Tom Reeg. “It was an unbelievable year.”
Reeg said fourth-quarter operating results demonstrated consolidated net revenue growth, reduced net loss, and stable consolidated adjusted EBITDA year over year. Results were driven by a 28% year-over-year increase in Caesars Digital net revenue that generated a 10% adjusted EBITDA margin in the quarter.
“Full-year results benefited from a 78% increase in Caesars Digital net revenues to approximately $1 billion and an over $700 million improvement in this segment’s adjusted EBITDA.”
Reeg said Las Vegas operations were impacted by a new union contract signed in the fourth quarter that required a catch-up payment. In addition, as the Versailles Tower is transitioned from the Horseshoe Las Vegas to Paris Las Vegas, 65,000 room nights were taken out of commission during the fourth quarter with an average daily room rate exceeding $200.
In addition, November hold favored players and resulted in about $20 million in adjusted earnings.
Las Vegas room revenue was up despite fewer available rooms. Food and beverage revenue rose in the double digits.
Slot handle was up, while the table drop was flat.
Construction disruptions around the county, weather, and competition all impacted regional properties.
To start 2024, Reeg said weather impacted markets. Still, the company expects growth in Las Vegas and regional markets, and digital the “most dramatic. If you look at what’s going on with digital. we’re seeing the fruits of our labor there.”
Fourth-quarter handle and revenue were up 50%-plus, Reeg said. Caesars Palace online has about the same level of revenue as its predecessor, but has created a shift. They anticipate more slot play and play that is skewed more toward women.
“Our icasino is ramping up quickly and continues to accelerate,” Reeg said. “It has bigger margins than online sports betting and that bodes well for this year.”
