Browse articles by topic

Combined Caesars-Eldorado business loses $2.72bn in first year


The combined Caesars-Eldorado business, now trading as Caesars Entertainment, brought in $6.10bn in 2020, down 42.5% from 2019’s combined revenue, and posted a $2.72bn loss with both pre-merger segments hit by the novel coronavirus (Covid-19) pandemic.

The results cover a year in which regional casino operator Eldorado Resorts acquired Caesars Entertainment, with the new business then taking the Caesars name.

The combined business made $3.93bn through regional operations in 2020, down 35.5%. Las Vegas revenue fell more sharply, by 54.8% to $1.77bn, while international and online revenue was $384m, down 35.5%.

The operator’s full breakdown of financial results covered only the legacy Eldorado business for up until July 20, 2020, and then the combined business from that point on. Counting revenue in this way, the business brought in $3.47bn, up 37.4% year-on-year, thanks mostly to the extra revenue generated from the acquisition. 

Of the remaining $2.63bn of the combined business’s revenue, $2.49bn came from the legacy Caesars business, and the remaining $138m came from properties Eldorado divested to complete the transaction.

Most of the Eldorado and post-merger revenue, at $2.34bn, came from gaming, with $337m from food and beverages, $450m from hotels and $350m from other sources.

Continuing to count only the legacy Eldorado business and post-merger combined activity, the operator’s expenses rose 86.7% to $3.91bn, again because of the acquisition, with costs of sales related to gaming the highest expense at $1.20bn, while general and administrative costs rose 75.3% to $882m.

This resulted in an operating loss of $437m, compared to a $410m operating profit in 2019.

Interest expenses then came to $1.17bn, and the business paid a further $195m in extinguishment of debt but made $176m in other income.

As a result, the business made a loss of $1.63bn from continuing operations before taxes, after a $125m profit in 2019.

After taxes, the net loss of the legacy Eldorado business for up until July 20, 2020 and the combined business from that point on totalled $1.76bn, compared to Eldorado’s $81m profit in 2019.

While the business did not break down legacy Caesars’ expenses, it said it made a net loss of $1.06bn. Divested properties, however, made a net profit of $93m.

This meant the combined business lost $2.72bn in 2020, up 133.7% from 2019’s loss.

“We are thrilled to close the book on 2020,” Caesars chief executive Tom Reeg said. “It was, by any measure, the most challenging year that we’ve had operationally and personally to date.”

The operator is set to acquire British betting operator William Hill for approximately £2.9bn ($3.72bn), with plans to then offload all of the William Hill business except its US betting arm. William Hill and Caesars already operate sports betting in 15 states and Washington DC through the American Wagering joint venture.

Caesars chief financial officer Bret Yunker said the deal is expected to close in the second quarter of 2021.