Caesars Optimistic On Subsequent F1 Race, Might Take into account Buybacks

Posted on: March 15, 2024, 03:05h. 

Final up to date on: March 15, 2024, 03:22h.

Caesars Leisure (NASDAQ: CZR) may take into account share repurchases if its inventory value stays stagnant, and the on line casino big is mulling mergers and acquisitions alternatives that will require the issuance of latest shares.

Caesars CEO Tom Reeg in a 2021 CNBC interview. He expects enhancements for the second Las Vegas F1 race and is bullish on the operator’s on-line unit. (Picture: CNBC)

Caesars CEO Tom Reeg commented on these issues Thursday on the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Administration Entry Discussion board. In a dialog with J.P. Morgan analyst Joseph Greff, Reeg mentioned that whereas there’s “no scarcity of alternatives out there” when it comes to acquisitions, Caesars received’t be working to difficulty inventory to make offers.

That’s possible a aid to shareholders at a time when Caesars inventory is down 16.2% year-to-date and since the issuance of latest shares, whatever the cause, would dilute present buyers.

Reeg additionally instructed Greff that free money move generated from conventional income sources in addition to the addition of a brand new on line casino in Danville, Virginia, and the transition of Harrah’s New Orleans to Caesars Palace branding can be used to scale back debt. The gaming firm has been actively paring excellent liabilities, which stood at $12.4 billion on the finish of final yr.

Second Las Vegas Grand Prix Might Be Higher for Caesars

Reeg additionally mentioned the Las Vegas Grand Prix with Greff. The System One (F1) occasion passed off final November in Sin Metropolis, however didn’t transfer the needle for Caesars as a result of the collection catered to high-end clients.

That resulted in advantages for upper-tier Strip venues, together with Aria, Bellagio, Caesars Palace, Cosmopolitan, and Wynn, however there wasn’t a lot constructive impression for different Caesars properties similar to Flamingo, Harrah’s and the Horseshoe.

Whereas F1’s return to Las Vegas didn’t generate the money move Caesars hoped for, Reeg expects “higher profitability” from the second Las Vegas Grand Prix, citing “a major beneficiary of the market-wide effort to higher tailor the occasion to mass-market contributors.”

Reeg instructed Greff that the gaming firm did accrue advantages from the Tremendous Bowl final month, however famous it’s “seeing extra idiosyncratic obstacles associated to occasions which are affecting March, together with lower-than-normal desk maintain in January and February.”

Caesars On-line Outlook Brilliant

Reeg additionally instructed Greff that the operator’s 2023 rebranding of its on-line on line casino to the Caesars Palace title is paying dividends. The change occurred final August, and in each month for the reason that change, gross gaming income (GGR) has topped inner estimates. Reeg added that fifty% year-over-year progress is the expectation with February income standing at $40 million.

He didn’t touch upon different states becoming a member of the iGaming occasion, but when that have been to occur, only one new state may assist Caesars generate money move on par with what’s seen in two or three others with regards to on-line sports activities betting.

Reeg additionally instructed Greff the gaming firm expects to roll out a second on-line model later this yr “to extend buyer acquisition and buyer engagement on the CZR on-line ecosystem.”

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