Caesars Entertainment executives Tuesday touted a record World Series of Poker financial windfall and expect a strong second half of the year for Las Vegas.
“This was our best World Series ever from a financial perspective,” CEO Tom Reeg told Wall Street analysts of the poker event at Paris Las Vegas. “It filled a lot of rooms on the east side of the Strip at a time when it’s almost 120 degrees here. It’s a significant amount of gamblers in the house and we see benefits in our hotel and food and beverage and at our table games and slots.”
In a follow up, Eric Hession, president of Caesars Sports & Online, said while online poker does okay, the economics are with the royalty streams and land-based casinos, generating between $20 million and $25 million in EBITDA for the year.
Caesars President Anthony Carano said Las Vegas group bookings continue to pick up for 2025, with a mid-teens increase, after increasing by mid-single-digits in 2024.
Reeg said the “massive amount of demand for Vegas has continued, driven by non-gaming, even though gaming has held up well.
“I expect Vegas to grow in the second half of the year in both the third and fourth quarters,” Reeg said. “We would need a swing in hold that offsets our hold impact in the first quarter to be a grower for the year.”
During the quarter, Reeg said Caesars had about $20 million in headwinds in Las Vegas, with union raises and new employees in restaurants that weren’t open a year. Gaming hold was in the typical range in the second quarter, he added.
Room renovations are paying dividends. One tower at Paris Las Vegas enjoyed average daily room rates up $65 year over year, a 60% lift. That was before rooms with balconies came online recently, Reeg said.
“That’s our most successful hotel renovation in the history of Caesars,” Reeg said. “The rest of the year looks strong and I expect Vegas to post growth. I know that’s not been reflected in estimates, but we feel really good about the rest of the year and into 2025.”
Reeg called the closure of the Mirage earlier this month a “mixed bag” in response to analysts suggesting that mid-tier properties along the Strip that aren’t faring as well as luxury would benefit.
“I’ve seen the rhetoric that non-luxury properties are underperforming luxury,” Reeg said. “That’s not what we’re finding in our portfolio. All of our properties perform in a similar fashion. Caesars Palace has the bulk of our highest-end business, so it’s the most volatile from a table-game perspective. In terms of visitation and pricing power and growth, they all look pretty similar.”
Reeg said closing the Mirage is helpful in terms of having fewer rooms in the market and admits Caesars will get its share of those room bookings. But given its proximity to Caesars’s existing properties, the Mirage served as a feeder to its casinos.
“If you went walking, you probably walked to our property, so I don’t think it will be a material driver in either direction,” Reeg said. “We will benefit from a little more occupancy and yield a little bit better, but we will lose that 3,000-plus rooms in the neighborhood that would have fed each other.”
Reeg blamed the 3.6% decline in revenue at the regional properties and 7.7% decline in adjusted earnings on a poor April. May and June were higher year over year, he said.
In New Orleans, Reeg blamed construction disruption in the middle of the casino that will continue for the next month-plus and impact the third quarter. In Reno where bowlers are important, Reeg said a group this year is 20% of the size of a year ago. That’s 40,000 room nights lost.
“The combination of those two items in the quarter cost us more than $25 million in EBITDA and those will continue in the third quarter. New Orleans construction will be completed by Labor Day.
“I expect the third quarter to look something like this and the fourth quarter, we get the benefit of New Orleans rolling out its new product,” Reeg said. “We have about $80 million of incremental gaming revenue and we expect Virginia to open by the end of the year. I would expect it would be a grower in the fourth quarter. We feel good about 2025 in regional.”
Reeg cited a 30% increase in net revenue growth in digital during the quarter and July is off to a fast start in excess of that target.
“By the end of the quarter, we’ll be into football, so we feel pretty good about that,” Reeg said. “We expect the Horseshoe brand in icasino can help us build on the games that we’ve had since we rolled out Caesars Palace online. Momentum is digital is quite strong for us and all of the targets we’ve laid out in the past are still within our grasp.”
