Despite growing revenue over the first half of the year, Caesars Entertainment reported on Monday a net loss of $532 million over the first six months of 2019. According to the press release distributed by the company to investors before its next earnings call, Caesars’ overall Q2 net loss was $315 million, which the company said was primarily due to sharp increases in overall operating expenses.
In May, the company reported a Q1 net loss at $217 million. The prior year’s Q1 net loss was $34 million while 2018 Q2 enjoyed $29 million in net income.
While net revenues increased 4.9% over the last quarter to $2.22 billion, the company’s income from operations decreased by 4.6% to $269 million during the quarter, making the overall net loss per share $0.47.
CEO Tony Rodio said Ceasars’ proposed merger with Eldorado Resorts, along with other efficiencies on which the company is working, might turn out to be a potential balm for the company’s mixed financial results.
“I'm confident that the proposed transaction will create an industry-leading platform poised to succeed in our dynamic industry," Rodio said.
Despite the overall net losses during each quarter in 2019, Caesars reported revenue growth at its casinos over the second quarter, especially at its Las Vegas properties. Overall, the company’s casino operations across the U.S. drove income during Q2. In fact, revenue went from a total of $2.04 billion last year to $2.21 billion in 2019.
Las Vegas tourism led the way for the company, the Wall Street Journal reported. Net revenues increased $10 million over last year, primarily because of increased hotel and food revenues in the area. Las Vegas hotel cash revenue increased 6.3% and occupancy was 97.5% during the quarter, up from 93.9% at the same time last year.
Moreover, Las Vegas food and beverage revenues seem to have benefitted from the increased occupancy. Caesars Palace, and its associated food and beverage portfolio, enjoyed the strongest performance of the group.
Caesars continued to expand its sports betting presence during the second quarter as numerous states have started to allow sports betting in response to the U.S. Supreme Court striking down the Professional and Amateur Sports Protection Act to 1992 that had previously placed a federal ban on sports wagering in states outside of Nevada.
Caesars continued to make inroads in the new environment, citing its design of seven sportsbooks across the Midwest, which includes additions to its Indiana properties as well as new sportsbooks in both Illinois and Iowa. Additionally, Caesars partnered with the Oneida Indian Nation for two sportsbooks on tribal lands in New York State as well as a sportsbook in Pennsylvania.
Caesars and Eldorado Resorts announced an industry-changing merger in June. Per the agreement between two longstanding rivals, Eldorado Resorts essentially agreed to buy Caesars Entertainment in a $17.3 billion cash-and-stock deal that will create the largest gambling company in the U.S.
The proposed merger, assuming it is granted governmental oversight approval, is expected to close during the first half of 2020. If it does, Eldorado shareholders will make up around 51 percent of the newly combined company while Caesars’ shareholders will retain the remainder.
When that happens, Caesars Entertainment and Eldorado Resorts will combine to create the largest owner and operator of U.S. gaming assets in the country, marking a historic and important change to the ever-competitive U.S. casino and sportsbook business climate.