Caesars expects high-rollers to return for F1, Super Bowl

Executives at Caesars Entertainment say they remain confident in the Las Vegas economy, especially as they look forward to major sporting events to be held in the region at the end of this year and early next.

CEO Tom Reeg told investors in the Reno, Nevada-based company’s second-quarter earnings call that there has been “no discernible impact” related to industry-watchers’ concerns about a potential recession in the macro economy. That steadiness comes ahead of the Formula One Grand Prix in November and Super Bowl XLVIII in February 2024.

The company hasn’t seen a notable pullback from any customer segments and future occupancies range from 96 to 98 percent depending on the property, Reeg said.

“It feels really strong out here. Today, volumes are as they’ve been for a year and a half and continue to be very strong,” Reeg said on the investor call. “It’s really hard to tell you anything that would give you a bearish set stance on Vegas.”

Revenue from the company’s Las Vegas segment fell 1.2 percent in the second quarter to roughly $1.13 billion compared to about $1.14 billion during the same time last year. Executives attributed the decline to comparison to strong performance at that time.

The company expects a significant boost from business generated during F1 and the Super Bowl. It estimates it will receive a 5 percent lift from hotel rooms alone during the inaugural motor sports race, held Nov. 16 to 18, with more possible generated from the casino operations.

And it expects high-rollers – both international, which has yet to return to pre-pandemic levels, and domestic, which has supplemented some of the international spend lost – to return stronger during the events.

“If you anecdotally look at who’s going to be getting our tickets, the average customer that will come to the game with us is substantially more valuable than prior Super Bowls,” Reeg said.

Reeg also updated investors on ongoing labor negotiations with Culinary Union Local 226. The company’s labor contract with the union representing most casino workers expired at the end of May and it – along with other operators on the Strip – has been running on an extended contract.

Reeg, who previously said frontline workers would get a “significant raise,” said the delayed new contract is due to “complex” negotiations.

“You’re talking about complex stuff that takes a little while but I’d expect that we’ll have new agreements by the fall and I’m not expecting a whole lot of drama around them,” he said.

Caesars Entertainment shares, traded on the Nasdaq exchange, fell $1.23, about 2.1 percent, to $57.79 at market close Tuesday.

McKenna Ross is a corps member with Report for America, a national service program that places journalists into local newsrooms. Contact her at mross@reviewjournal.com. Follow @mckenna_ross_ on Twitter.