Caesars Continues Paring Debt, Digital Unit Notches Profit

Updated: 16.11.2023

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There was more resilience from Caesars Entertainment Inc. in the third quarter, with the company reporting an EBITDA profit of $2 million - an encouraging comeback following a loss of $38 million last year.

The positive news means the company has reduced its debt to $12.45 billion, down from $13.08 billion. The outlook looks rosier than in January 2023, when the company announced it was upping a secured loan term facility from $1.75 billion to $2.5 billion to eliminate a $4.4 billion debt liability due in 2024 and 2025.

This could represent a welcome respite for investors who have faced concerning company headlines over the past 12 months, including junk credit resulting in a $2.3 billion interest expense.

The Caesars sportsbook and online casino has also been faring well, with the relaxing of gambling restrictions around several states over the last few years helping drive profits up.

Lots to Look Forward To For Caesars Investors

Las Vegas is one of the most visited tourist destinations in the world, and Caesars, along with resort rivals, are in continuous competition to land the best events as part of its offering.

For example, Caesars is set to host Formula One's Las Vegas Grand Prix in November, an event CEO Tom Reeg anticipates will provide a massive boon to the business.

In a call with analysts, he said: "We also have F1 coming to Vegas. We feel very, very good about that and anticipate no change in what we're expecting in terms of lift in the quarter in the neighbourhood of 5%."

They aren't just looking at impacting the events space in Las Vegas, either. Property developments to Caesar casinos in Columbus, Nebraska, and Danville, Virginia, and remodelling its New Orleans institution could also be potential catalysts for positive trends.

Tentative Deal Reached with Caesars Entertainment Union

In further good news for the company, a tentative deal was reached with unions representing hospitality staff, which number approximately 10,000.

A new labor contract has been established, with the organization pledging 'meaningful wage increases' for its staff, better safeguarding of staff roles amidst a job-stealing technology wave, and a welcome decrease in shift allocations.

This agreement was reached just in time, with a strike deadline looming and the upcoming Formula One race requiring full staffing.

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