Caesars Entertainment is eyeing a US sports wagering drive as the group sees a significant swing in fourth quarter and full-year net income in its latest financial report.
During 2019’s final quarter a net loss of $304m was reported, as opposed to income of $198m a year earlier, with 2018 full-year income of $303m seeing a $1.5bn shift to a loss of $1.19bn.
In a media release the firm aligns the change to “an increase in other loss of $1.38bn primarily due to a year over year change in the fair value of the derivative liability related to the CEC convertible notes”.
Revenue during Q4 increased 2.6 per cent to $2.16bn (2018: $2.11bn), primarily driven by significant growth in Las Vegas due to healthy consumer demand, new sportsbook entries, particularly in Iowa and Indiana, and better results in Atlantic City.
For the full-year revenue reached $8.74bn, a 4.2 per cent rise from $8.39bn, due to the acquisition of Centaur in July 2018, strong Las Vegas results and favorable hold, which helped offset lower gaming volume at Atlantic City properties as a result of increased competition and inclement weather.
Income from operations during the quarter increased 77 per cent to $177m, driven by increasing net revenue, with a 16.4 per cent decrease to $618m (2018: $739m) felt across the full year due to an increase in operating expenses of $472m offset by an increase in net revenue of $351m year-on-year.
Adjusted EBITDA increased 16 per cent and 4.2 per cent during Q4 and FY, respectively, to $583m (2018: $567m) and $2.4m (2018: £2.3bn). Revenue increases, cost controls and strong Las Vegas results were offset by further competition in Atlantic City and increased investments in sports sponsorships.
“Caesars Entertainment delivered another quarter of solid operational performance,” stated Tony Rodio, president and chief executive officer of Caesars Entertainment. “Caesars’ results were largely driven by the strong demand at our Las Vegas properties, excellent cost controls, and the addition of sports betting in several states which drove increased visitation. In addition, our focus on costs and operating efficiencies across the company contributed to the excellent performance.”
Adding on an ambition to increase the firm’s sports betting footprint: “We also continue to grow our sports betting business across the quarter and are pleased with the progress we’ve made over the past year. We now have 29 seasons branded sportsbooks across seven states.
“As a result of these installations, we have seen an increase in visitation, food and beverage buying particularly in Iowa, Indiana, and Mississippi. We have licenses approved to launch mobile sports betting in Pennsylvania, Indiana and Iowa, and plan to do this over the course of the first half of this year subject to regulatory approval.
“We reiterate our view of sports betting as being a key value driver for the company and anticipate expanding our footprint to more markets over time.”