Caesars Entertainment CEO Optimistic Gaming Company Will Rebound This Year
LISTEN TO THIS ARTICLE:Caesars Entertainment CEO Tom Reeg took center stage at the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum in Las Vegas on Wednesday. He shared insights on various aspects of the casino and gaming company's operations, showing optimism for renewed growth this year.
Second Time's the Charm
Reeg highlighted the continued momentum in the Las Vegas market, attributing it to factors such as limited growth in room and gambling supply on the Strip. He also noted improvements in international and convention business, with Las Vegas emerging as a preferred destination.
An interesting shift in customer demographics was pointed out, indicating a more diverse profile among high-end clientele compared to pre-COVID-19 trends. This shift towards a mix of domestic luxury customers was seen as a positive development.
Addressing the performance of the Las Vegas Grand Prix, Reeg expressed confidence in better profitability for this year's event after Caesars didn't receive the boost it expected in the 2023 inaugural F1 race. He attributed this optimism to a market-wide effort to tailor the event to mass-market participants, positioning Caesars as a primary beneficiary.
Despite benefiting from events like the Super Bowl, Reeg acknowledged challenges in the current operating environment, including lower-than-normal table hold and idiosyncratic obstacles affecting March revenues. However, he remained hopeful for full-year growth, citing favorable comparisons in the latter part of the year.
Reeg also touched on the impact of wage increases from Culinary Union and Bartender's Union contracts on the company's bottom line. He anticipated the full effect to be felt in the first three quarters of 2024, with continued impact into the fourth quarter.
Other Markets to Support Vegas Success
Turning to Caesars's markets outside of its Las Vegas core, Reeg highlighted resilience among customers despite individual weaknesses attributed to new competition. Plans for new developments in Virginia and an upgrade of Harrah's New Orleans were mentioned as strategies to counterbalance these challenges.
On the digital front, Reeg shared positive performance indicators for Caesars Palace-branded iGaming, which surpassed expectations in revenue growth. Plans for launching a second online brand later this year were announced, aiming to enhance customer acquisition and engagement within the CZR online ecosystem.
Looking ahead, the long-time gaming veteran underscored the potential for further growth in online gaming, particularly with the addition of new states legalizing iGaming. He expressed confidence in Caesars's ability to capture market share and leverage its existing customer base effectively.
In light of all of the positive momentum, Reeg believes the company will have no trouble meeting its end-of-year financial goals.
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