Q2 Revenue Down, But Caesars Focuses On Future After Merger
Caesars Entertainment, formerly Eldorado Resorts, issued its second-quarter earnings report Thursday, and with many of its casinos closed during the period revenue declined sharply. But the recently completed merger between Eldorado and Caesars has the new company looking toward the future.
With 51 properties of the new Caesars Entertainment in the U.S. having resumed operations since mid-May, the company believes the third quarter looks promising.
“Our properties began to reopen in late May and early June. All of the combined new Caesars Entertainment, Inc. regional properties are now reopened and we are encouraged by operating trends,” Tom Reeg, chief executive officer of Caesars Entertainment, said in a news release. “Our second quarter operating trends were negatively impacted as the majority of our properties remained closed during April and May 2020.”
Key numbers from the Caesars earnings report:
- Net revenue of $126.5 million for legacy Eldorado Resorts properties. That was a decrease of 78.2% on a same-store basis for the second quarter of 2019.
- Net loss of $100 million compared to net income of $18.9 million for Q2 lat year.
- Same-store Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for legacy Eldorado Resorts of -$10.4 million compared to $164.8 million for the second quarter of 2019.
Eldorado-Caesars Deal Closes
Eldorado Resorts closed its $17.3 billion deal for Caesars Entertainment on July 20, creating the largest casino and entertainment company in the U.S. Eldorado paid $7.2 billion in cash and around $77 million in stock shares, while taking on about $9 billion of Caesars' outstanding debt.
The combined company now operates under the Caesars Entertainment brand and has more than 50 U.S. casinos in 16 states.
It took approvals from Nevada, Indiana and New Jersey over a 10-day period in mid July to close the deal. Eldorado, which was once a small, family-owned casino company based in Reno, Nevada, will hold 56% of the company and will trade publicly on Nasdaq under CZR.
The New Caesars said in the news release that its “pro forma liquidity” positions the company going forward to weather any short term disruptions because of the coronavirus pandemic.
“Now that the merger has closed, our operating teams are fully engaged with integrating the two companies and executing on the synergy plans,” Reeg said. “We remain optimistic regarding an eventual recovery of travel and tourism in the U.S. and especially Las Vegas.”
Before the merger, Eldorado did not own any casinos on the Las Vegas Strip. It now has eight properties on the Strip, including Caesars Palace, Flamingo and Harrah’s.
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