In Caesars Entertainment’s first quarter earnings call of 2024, it reported an overall dip in revenue year over year.
Despite the drop-off in revenue, Caesars executives expressed confidence that this was a one-time decline and better quarterly statements would follow. One reason for their optimism is the outlook for the Caesars Danville casino, which is operating out of a temporary facility.
Caesars Danville is one of just three Virginia casinos. Despite its temporary status, it performs very well against the other two casinos in the state–Rivers Casino Portsmouth and Hard Rock Hotel & Casino Bristol.
Caesars Claims Weather, Other One-Time Negatives Hurt Bottom Line in Q1
Caesars net revenue for the first quarter of 2024 was $2.7 billion, 1.2% lower than its $2.8 billion in the first quarter of 2023. Net loss equaled $158 million, $22 million more than in the first quarter of 2023.
Those numbers do not inspire excitement, but Caesars Entertainment Chief Executive Officer Tom Reeg preached optimism during the earnings call.
“In our Regional segment, results reflect weather-related weakness in January and early February, partially offset by our new property openings … Moving past the first-quarter headwinds, we remain optimistic toward improved operating results throughout the balance of the year.”
Caesars’ bottom line was affected by its operations in Virginia. January was so full of rain in the commonwealth that it caused flash flooding on top of heavy winds and other severe weather cycles. Additionally, Caesars has been working toward completing its permanent Danville location, but that will take some more time.
According to Reeg, first-quarter 2024 was a perfect storm, pun intended.
“Everything that could have gone wrong for us did,” he said. “We had well over $75 million in one-time negatives in the quarter.”
But Reeg and other Caesars executives appear confident that better quarterly statements are on the horizon, and the growth of Caesars Danville could be a big part of that potential improvement.
Caesars Reaffirms Danville’s Permanent Facility Will Open in December
One reason for Caesars’ confidence is how much Caesars Danville could grow once its new facility is built and opened to the public. The current projection has the permanent Caesars hotel and casino completed in December of this year.
Caesars took another step toward its completion when it closed on a new $425 million bank financing deal. According to Caesars Chief Financial Officer Bret Yunker, those funds should push Caesars Danville across the finish line.
“On April 26th, our Caesars Virginia joint venture successfully closed on a new five-year, $425 million pro rata bank financing [deal]. This financing will be used to fund the remaining capex (capital expenditures) associated with the permanent casino resort facility, which is expected to open in December 2024. Excluding joint venture capex, we estimate 2024 cash capex spend of $800 million. We anticipate using free cash flows to continue to reduce debt in 2024.”
According to the Caesars Virginia website, this is what can be expected from the permanent facility:
“A 500-room hotel and a world-class casino gaming floor with over 1,300 slots, 85 live table games, 24 electronic table games, a WSOP poker room and a Caesars Sportsbook. In addition, the resort will feature a full-service spa, pool, high-quality bars and restaurants, a 2,500-seat state-of-the-art live entertainment theater and 40,000 square feet of meeting and convention space.”
The location is expected to bring so many visitors that some are worried Caesars Virginia will not have a large enough hotel to accommodate them. For Caesars and the state, having too many visitors would be one of the more encouraging problems to address.
Caesars Working On Single Virtual Wallet Across Different States
Another interesting tidbit shared during the first quarter earnings call is that Caesars is working toward an interface allowing bettors to use one digital wallet across state lines.
Currently, players must make a new account in each state they choose to wager in if playing online. Streamlining that process would make it easier for bettors who travel frequently.
No time frame or additional details were shared during the earnings call, but the fact that it was mentioned means efforts are being put toward that goal.
Online Gaming is Central To Caesars’ success, but Will Virginia Legalize iGaming?
Another way Caesars could bolster its financial statements is the expansion of digital gaming across the country. There is a Virginia sports betting market in both retail and mobile settings, which includes Caesars, but the state has yet to take any meaningful steps to legalize online casinos.
The online casino market has been a big lift for Caesars despite its less-than-ideal first quarter. According to Reeg, Caesars Digital grew despite many obstacles holding it back, and online casinos were the reason.
“Caesars Digital delivered strong revenue growth despite lower-than-expected hold in online sports due to unfavorable outcomes for the Super Bowl and March Madness,” Reeg said.
If lawmakers in the commonwealth decide to introduce legislation to legalize a Virginia online casino market, it could be another boon for Caesars and provide more tax dollars to the state.
