Casino powerhouse Caesars Entertainment, Inc. still plans to sell one of its eight resorts on the Las Vegas Strip, but says it is in no rush to do this right away.
The company will instead wait until the market further rebounds from the heavy turbulence caused by the coronavirus pandemic. The worst global health crisis in many years forced months-long closures of non-essential businesses around the world.
Anti-pandemic measures crippled the Las Vegas casino industry, but things have now begun returning to a relative degree of normalcy. Three of the city’s casino resorts – Wynn, Encore, and The Cosmopolitan – have been allowed to resume operations at 100% capacity and more are anticipated to follow. Nevada Gov. Steve Sisolak has revealed plans to allow Nevada to reopen at 100% capacity by June 1.
Caesars has been planning to sell one of its Strip assets since its merger with Eldorado Resorts was first announced in the summer of 2019.
However, the company’s CEO, Tom Reeg, said recently that they are convinced “that it does not make sense for us to market an asset until we can market it off the cash flow that we’re doing with it, not off a bridge to what we think we can do with it.”
The executive further noted that a sale could possibly occur in 2022. It is unknown which property the company wants to offload from its portfolio. Its merger with Eldorado last year created the largest US casino operator by number of properties with over 60 gaming and entertainment complexes around the nation.
California Tribe Looked at a Strip Property
The San Manuel Band of Mission Indians looked at a Caesars Strip property before announcing an agreement to buy Palms Casino Resort from Fertitta-owned Red Rock Resorts in a $650 million deal that is expected to close later this year.
The California-based tribe’s CEO, Laurens Vosloo, has not said which property they were interested in buying before the Palms purchase.
Caesars recorded net loss of $423 million in the first quarter of the year and generated revenue of $1.7 billion. In Las Vegas, its revenue was down a little over 39% to $497 million during the three months ended March 31, 2021.
However, the company expects business to improve as the year goes on. Mr. Reeg said during an earnings call that the above numbers “don’t tell the story this quarter” as they had “Illinois and Pennsylvania still closed” at the beginning of the year’s opening quarter.
Mr. Reeg continued that in Nevada they did not have “the state open to 50% until two weeks were left in the quarter, so we say demand built through the quarter.”
Occupancy at the company’s Las Vegas properties has been on an upward trend over the past few months with total occupancy reaching 84% in April. Caesars further noted that it expects weekends to be sold out for the foreseeable future.
Source: Caesars delays plans to sell one of its Vegas Strip casinos, Associated Press News, May 11, 2021
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