Caesars Q3 shows Vegas slide as digital and regionals gain ground

Caesars Entertainment's third-quarter results, released on Tuesday, showed Las Vegas revenue sliding again while its regional casinos and digital betting arm both posted gains, iGaming Business reported.

The figures land as the operator works toward completing its $17.6 billion sale to Fertitta Entertainment, a deal first announced in May after a prolonged bidding contest between Fertitta and rival investor Carl Icahn.

Caesars shareholders backed the takeover with a 65% vote in favour on 22 September. The Federal Trade Commission has since asked for further documentation on the merger, on 17 September, pushing the antitrust review out by at least another 30 days. Completion is still expected around the middle of next year.

Las Vegas revenue fell 2% year-on-year to $930 million in the quarter. Adjusted EBITDA dropped 10% to $343 million, and net income fell 40% to $79 million. Year-to-date, the Strip business is down 2% on revenue, 8% on adjusted EBITDA and 21% on net income.

Caesars will be taken private once the Fertitta transaction closes, but its public shares have already fallen a long way from their 2021 peak of more than $100, trading at roughly $29 this week. The stock slipped less than 1% in Tuesday's session.

No analyst call was held this quarter because of the pending merger. Chief executive Tom Reeg instead addressed the deal last month at the Global Gaming Expo in Las Vegas, arguing that running a public company in 90-day cycles is "not healthy" and that the constant pressure is "not how you run a business".

Reeg told the G2E audience the appeal of going private lies in folding Caesars' hospitality and restaurant operations, which span more than 400 outlets nationally, into one combined structure he described as "greater than the sum of its parts".

Away from Las Vegas, Caesars' regional casinos delivered the strongest quarter of the three segments. Revenue rose 6% to $1.6 billion and adjusted EBITDA climbed 3.5% to $524 million. Year-to-date, regional adjusted EBITDA is up 4.5% at $1.4 billion, with net income up 6% to $69 million.

Caesars now runs 54 properties across 20 North American jurisdictions, 46 of them outside Las Vegas. Fertitta's existing Golden Nugget chain operates eight casinos, seven of them regional. The two companies already compete head-to-head in several markets, including Lake Tahoe, Laughlin, Atlantic City, Lake Charles, Danville and Biloxi.

Caesars' 2020 merger with Eldorado Resorts required the divestment of several properties to satisfy antitrust regulators, and Reeg said at G2E he would not be surprised "if a property or two ultimately gets divested" as part of the Fertitta deal.

The company finished the quarter with $864 million in cash and equivalents against total debt of $11.6 billion, which Fertitta is set to assume as part of the acquisition.

Caesars Digital remains the group's fastest-growing segment. Revenue rose 5% year-on-year to $326 million, while adjusted EBITDA jumped 57% to $44 million. Net income swung from a $21 million loss a year earlier to a $4 million profit. Year-to-date, digital revenue is up 6%, adjusted EBITDA up 20% and net income up 194%.

The division offers online sports betting and iGaming across a range of North American jurisdictions, and speculation that Caesars could eventually sell it off had circulated for some time before the Fertitta agreement emerged.

Caesars has notably stayed out of prediction markets, a stance it attributes to concerns about protecting its retail casino licences, in contrast to rivals FanDuel, DraftKings and Fanatics, which have made significant investments and spent heavily on acquiring customers for such products.

At G2E, Reeg criticised the prediction-market sector, pointing out that Kalshi had listed contracts on whether Caesars itself would be acquired. He said he could in theory have traded on the outcome himself, telling the crowd: "There was nowhere in their rules that said I couldn't place a bet."