Caesars Entertainment talked up its regional operations in its investor call on Tuesday, citing the opening of the Caesars New Orleans expansion in October, and the permanent Caesars Virginia in December. Results in Las Vegas, though flat year-over-year, should pick up as 2025 progresses with higher group business, the company said.
In Las Vegas, same-store net revenues during the fourth quarter were $1.1 billion and adjusted EBITDAR was $478 million, down 1% compared to a year ago, said COO and President Anthony Carano. “We were pleased with results in Las Vegas, especially when compared to the inaugural F1 race held in 2023.”
Margins were 44.4%, while occupancy was 96% during the fourth quarter, down slightly from last year. Group business comprised 16% of occupied room nights and recent investments in Las Vegas rooms and gaming offerings “have delivered some of the strongest returns in our Las Vegas portfolio’s history, driven by strong cash average daily room rates and increased gross gaming revenues,” Carano said.
In the regional segment, net revenues declined 1% and adjusted EBITDAR declined 5%, and there were improvements sequential in rates of EBITDAR decline versus the second and third quarters, Carano said.
“Results in our regional segments were driven by competitive pressures in certain markets offset by contributions by the two new facilities we opened later in the quarter. With both new properties exhibiting strong early results, we’re excited to capture a full year of results from both New Orleans and Danville (Virginia) in 2025.”
Carano said 2024 concluded an intensive capital-investment cycle that began at the close of the merger in July 2020. Completed capital projects will have “meaningful contributions” in 2025 and beyond, while Caesars cycles through competitive pressures in its regional segment.
“We expect the return on investment and continued strength in both brick-and-mortar properties and Caesars Digital will produce a dramatic increase in free cash flow in 2025 and 2026.”
CEO Tom Reeg said the company is proud of its performance in Las Vegas during the fourth quarter compared to last year. Cash room revenue was down less than 1%, despite the lack of the F1 business. The same is true for food and beverage revenue, while slot coin-in set an all-time record for the operator in Las Vegas and table win was up, helped by a higher hold.
The regional segment has $500 million of trailing EBITDA out of $1.9 million in the middle of facing new competitive threats in those markets, Reeg said. Since an October earnings call, Reeg said the competitive impacts haven’t been as severe as indicated then, while the newly opened properties’ performances are stronger than expected.
“The regional business continues to improve,” Reeg said. “We’re attacking properties that have opened. We’re fighting and increasing investment in battleground markets and I encourage you to look at state monthly revenue reports out of Iowa and Indiana that show what’s happening with share and revenue as we fight for those markets following competitive openings.”
Reeg said Virginia “has been beyond our wildest expectations in performance, effectively doubling revenue after doubling capacity.” While New Orleans had a “spectacular Super Bowl,” January was impacted by the deadly terrorist attack on New Year’s Eve some four blocks from their property. A citywide convention was cancelled shortly after and then the city had its first measurable snow since 1895.
“We have almost four months of performance in New Orleans, but it’s been a roller coaster,” Reeg said. “It has been very well received and the numbers are very strong, excluding the noise around the terror and weather.”
Overall, Reeg said they’re “sanguine” on regional properties in 2025 and 2026 should be even better.
Reeg is excited about Caesars Digital stacking quarters on top of each other from previous years.
In 2025, not having the Super Bowl, impacted Las Vegas, but a recovery of normal hold should offset the loss of the room revenue from the game, Reeg said. He expects a flat first quarter and group business will increase in 2025 over last year and increase again in 2026.
Eric Hession, president of Caesars Sports & Online Gaming, said 2024 delivered all-time records in net revenue, EBITDAR, and cash flow. Total net revenue was $1.2 billion, up to 20% year-over-year, and adjusted EBITDAR was $117 million versus $38 million in 2023. For the fourth quarter, the segment generated $303 million and $20 million in adjusted EBITDAR.
“Absent our low hold in the fourth quarter, our digital segment would have generated approximately $370 million of net revenue and $60 million of EBITDAR.”
Igaming delivered strong results all year, culminating in 65% net revenue growth in the fourth quarter. In January, Caesars announced the launch of the first online-branded live-dealer studio in Pennsylvania, with plans to do similar studios in New Jersey and Michigan during the first half of 2025.
Sports betting net revenue declined during the fourth quarter due to “customer-friendly outcomes in October and December,” Hession said. Without those outcomes, it would have resulted in record hold percentages.
Hession said they expect another strong year of revenue and EBITDAR growth, which will ultimately lead Caesars to its $500 million EBITDAR goal.
Chief Financial Officer Bret Yunker said Caesars used proceeds from non-core asset sales, including the World Series of Poker, to pay $500 million in debt and repurchase additional stock. It acquired 5.1 million shares for $190 million with an average price of $37 per share in 2024.
