In its second quarter, Caesars Entertainment Corporation has seen net revenue growth despite shrinkage of income from operations, with CEO Tony Rodio stating that trading in the period had delivered solid financial results.
During Q2, net revenues increased 4.9% to $2.22bn, while income from operations decreased 4.6% to $269m. Net loss attributable to the company was $315m, with basic loss per share of $0.47. The firm went on to report that non-GAAP hold adjusted net revenues increased 5.6% to $2.22bn and non-GAAP adjusted EBITDAR grew 1.3% to $631m.
The investor update also gave brief mention to the company’s regional sports betting expansion, noting: “Favorable legislative decisions allowed Caesars to further expand its sports betting presence across its portfolio in the second quarter.
“In the Midwest, the company is currently designing seven sports books across its Indiana properties, and will look to add new sports books in both Illinois and Iowa. Caesars opened two sports books for the Oneida Indian Nation in New York. The company also opened a sports book in Pennsylvania.”
Addressing the broader subject of legislative change and its impact on the business, Caesars added: “During the second quarter of 2019, Caesars was impacted by legislative changes in Indiana, Louisiana, and Illinois. In May, the State of Indiana approved gaming legislation that enables the company to offer table games at its Centaur properties beginning January 1, 2020. Additionally, the legislation allows Caesars to operate sports betting at its casinos and off-track-betting facilities in Indiana.
“On June 7, 2019, the governor of the State of Louisiana signed into effect legislation that would enable a 30-year extension – to 2054 – of the Harrah’s New Orleans operating contract upon certain conditions being met by Caesars, including an investment of $325m in the property by 2024 to improve the facility, add new restaurants, and construct a new hotel.
“In June, the State of Illinois enacted legislation significantly expanding gaming operations throughout the state, which is expected to adversely affect the company’s existing Illinois and Northern Indiana properties.”
Summarizing, Rodio told investors: “Caesars delivered solid financial results in the second quarter driven by the contribution from Centaur and strength from our Las Vegas hotel and food and beverage businesses.
“Our Las Vegas performance was the result of strong group and leisure demand, which produced an all-time quarterly record for hotel cash revenue and occupancy for the second consecutive quarter. These results were partially offset by competitive pressures in Atlantic City and other parts of our regional portfolio as well as unfavorable hold, predominately at Caesars Palace.
“As we work toward successful completion of the proposed merger with Eldorado Resorts, the management team and I remain focused on improving the company’s operations and financial profile through incremental revenue opportunities and operating efficiencies. I’m confident that the proposed transaction will create an industry leading platform poised to succeed in our dynamic industry.”