Caesars planning to reopen the Rio as company leaders tout Las Vegas operations

Caesars CEO Tom Reeg said Thursday the company would open the off-Las Vegas Strip Rio Casino Resort, possibly next month. Caesars operates the Rio under a management contract with a New York investment firm.

The comment, made during the question-and-answer session of Caesars’ third quarter conference call, seemed to run opposite current Las Vegas operating trends, which has resort companies reducing operating hours, especially during the slow mid-week period.

“When we get into a post-COVID world, the pent-up demand for gaming and Las Vegas, in general, will be beyond your wildest dreams,” Reeg told gaming analysts. “We’re not talking about shutting down properties. We’re reopening additional properties.”
Reeg extended those comments to include gaming throughout the country. He said Americans’ propensity to gamble, especially after having seen their travel plans thwarted for much of the year due to COVID-19, will resurface quickly. He advised analysts not to bet against the rebound because “that’s been a losing bet since the dawn of civilization.”

He also provided cash flow totals for the company’s Las Vegas properties since the resorts reopened on June 4 following Nevada’s 78-day gaming closure due to the pandemic.

Starting in July, Reeg said cash flow was $10 million for that month, $16 million in August, $34 million in September, and is pushing $50 million for October, which is still being calculated. He noted October numbers included the operating costs involved in keeping Planet Hollywood, The Cromwell and Rio closed during the quarter and just a few weeks of operations from Bally’s Las Vegas.

Caesars President Anthony Carano said the loosening of crowd size restrictions by Nevada governor Steve Sisolak has allowed the company to host and schedule several small group meetings in Las Vegas during the last three months of the year.
Meanwhile, Reeg noted the potential that conventions might be able to proceed at up to 50% capacity after Jan. 1 has helped the bookings for the Caesars Forum Conference Center, “which was open for a few days” when the pandemic hit.

He said the location has booked 172 events for 2021 that cover 1.6 million room nights with a combined budget of $600 million for rooms and banquet revenues.


However, Reeg cautioned, “none of this will happen until the public health situation” is resolved. He expected the first three months of 2021 “will look a lot like the last three quarters of 2020.”

The quarter marked the completion of the $17.3 billion merger between Caesars and Eldorado Resorts on July 20. Eldorado was the acquiring company, but the merged operation retained Caesars’ name and stock symbol. Reeg and the rest of the Eldorado management team took over control of Caesars.
During the quarter that ended Sept. 30, Caesars reported net revenues of $1.4 billion, but a net loss of $926 million.

At the end of September, Caesars agreed to acquire United Kingdom-based sports betting giant William Hill for $3.7 billion. Caesars already had a sports betting joint venture partnership with the company’s U.S. subsidiary. The deal is expected to close next year and will expand Caesars’ sports betting presence across the U.S.

Caesars raised $1.9 billion in new debt to fund the deal. The company also announced the sale of Tropicana Evansville in Indiana for $480 million. Company executives hinted at other casino sale announcements before the end of the year.
As of Sept. 30, Caesars had $16.2 billion in long term debt.

Shares of Caesars closed at $56.13 on the Nasdaq Thursday, up $3.93 or 7.53%.