Caesars Entertainment Inc
For the period ended Jun 30, 2024. Filed Jul 30, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 30, 2024
CZR$29.23+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-30.
0001590895-24-000088
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-30.
0001590895-24-000124
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 110 previous paragraphs and 123 current paragraphs.
56 unchanged; 53 reworded; 13 added; 1 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
•Impairment Charges – Primarily due to localized competition within certain markets in the Regional segment, resulting in decreased projected future cash flows at certain properties, the Company recognized impairments of certain intangible assets. The Company identified trademarks, gaming rights and goodwill at three reporting units with estimated fair values below their respective carrying values. During the three and six months ended June 30, 2024, the Company recognized impairment charges totaling $118 million. During the three and six months ended June 30, 2023, the Company did not realize an impairment.
Current report
For the three months ended June 30, 2024, as compared to the same prior year period, consolidated net revenues decreased primarily due to continued headwinds in our Regional segment as a result of increased competition in certain markets and construction disruption from renovation projects at certain of our properties. The Las Vegas segment continues to generate high hotel occupancy, improved room rates and improved table games hold in the second quarter of 2024. Caesars Digital continues to generate strong revenue growth driven by improved sports betting hold and increases in both iGaming handle and iGaming hold.
Current report
Impairment charges were recorded within our Regional segment in June 2024 as a result of a decrease in projected future cash flows at certain properties primarily due to localized competition.
Current report
(a)Prior year gaming volumes include Rio’s table games drop of $23 million and $50 million for the three and six months ended June 30, 2023, respectively, and slot handle of $111 million and $244 million for the three and six months ended June 30, 2023, respectively.
Current report
For the three months ended June 30, 2024, as compared to the same prior year period, our Las Vegas segment’s net income, Adjusted EBITDA and Adjusted EBITDA margin increased slightly as a result of improved hotel occupancy and higher room rates and table games hold. Increased labor costs and the divestiture of Rio at the end of the third quarter of 2023 partially offset these increases and contributed to lower gaming volumes and casino revenue. However, a decrease in rent associated with Rio provided a benefit to net income, Adjusted EBITDA and Adjusted EBITDA margin. New food and beverage offerings also contributed to improved net revenue and Adjusted EBITDA.
Current report
As a result of the continued headwinds in the Regional segment impacting certain of our properties, we recorded impairments totaling $118 million during the six months ended June 30, 2024.
Current report
Caesars Digital’s net revenues, net income (loss), Adjusted EBITDA, and Adjusted EBITDA margin improved significantly for the three and six months ended June 30, 2024, as compared to the same prior year period, primarily due to higher iGaming handle and iGaming hold coupled with improved sports betting hold. Sports betting hold improved for the three and six months ended June 30, 2024 compared to prior year, reflecting the benefit of continued investment in our sports betting platform.
Current report
(a)Benefit for income taxes during the three and six months ended June 30, 2023 includes the release of $940 million of valuation allowance against deferred tax assets.
Current report
(c)Impairment charges for the three and six months ended June 30, 2024 includes impairment within our Regional segment as a result of a decrease in projected future cash flows at certain properties primarily due to localized competition.
Current report
(b)Excludes approximately $280 million of additional borrowing available under the CVA Delayed Draw Term Loan.
Current report
On May 9, 2024, we entered into a fourth amendment to the CEI Credit Agreement which, among other things, reduces the interest rate margin applicable to the Company’s existing CEI Term Loan B to 2.75% per annum in the case of any Term SOFR loan and 1.75% per annum in the case of any Base Rate loan. Prior to the fourth amendment, the applicable margin was 3.25% per annum in the case of any Term SOFR loan (plus a Term SOFR adjustment of 0.10%) and 2.25% per annum in the case of any Base Rate loan, subject to one 0.25% step-down based on our net total leverage ratio. On June 28, 2024, we made a voluntary repayment of $100 million in aggregate principal amount of the CEI Term Loan B with cash on hand.
Current report
On April 26, 2024, Caesars Virginia, LLC entered into a credit agreement with Wells Fargo Bank, N.A., as administrative agent and collateral agent, and certain banks and other financial institutions and lenders party thereto (the “CVA Credit Agreement”), which provides for a senior secured first lien multi-draw term loan facility in an aggregate principal amount of $400 million (the “CVA Delayed Draw Term Loan”) and a senior secured first lien revolving credit facility in an aggregate principal amount of $25 million (the “CVA Revolving Credit Facility”), both maturing on April 26, 2029. The CVA Delayed Draw Term Loan requires quarterly principal payments commencing on the last day of the first full fiscal quarter following the opening date of the permanent facility of Caesars Virginia. The CVA Revolving Credit Facility and the CVA Delayed Draw Term Loan are subject to a variable rate of interest based on Term SOFR plus an applicable margin. As of June 30, 2024, there was $120 million utilized under the CVA Delayed Draw Term Loan.
Current report
The CVA Revolving Credit Facility and the CVA Delayed Draw Term Loan contain covenants which are standard and customary for this type of agreement, including a maximum net total leverage ratio financial covenant of 4:1 and a minimum fixed charge coverage ratio financial covenant of 1.05:1. Caesars Virginia LLC’s compliance requirements commence after the first full quarter following the opening of the permanent facility of Caesars Virginia.
Removed paragraphs (1)
Previous report
Caesars Digital’s net revenues, Adjusted EBITDA, and Adjusted EBITDA margin increased for the three months ended March 31, 2024, as compared to the same prior year period, primarily due to higher iGaming handle and hold. Sports betting hold improved for the three months ended March 31, 2024 compared to prior year, however, it remains at the lower end of our expected range due to less favorable hold during large sporting events in the current quarter. Both current year and prior year periods were negatively impacted with increased promotional spend during the launch of Caesars Sportsbook in North Carolina in March of 2024 and Ohio and Massachusetts in January and March of 2023, respectively.
Reworded paragraphs (53)
Previous wording
The following discussion and analysis of the financial position and operating results of Caesars Entertainment, Inc., a Delaware corporation, and its consolidated subsidiaries, which may be referred to as the “Company,” “CEI,” “Caesars,” “we,” “our,” or “us,” for the three months ended March 31, 2024 and 2023 should be read in conjunction with the unaudited consolidated condensed financial statements and the notes thereto and other financial information included elsewhere in this Form 10-Q as well as our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Annual Report”). Capitalized terms used but not defined in this Form 10-Q have the same meanings as in the 2023 Annual Report.
Current wording
The following discussion and analysis of the financial condition and operating results of Caesars Entertainment, Inc., a Delaware corporation, and its consolidated subsidiaries, which may be referred to as the “Company,” “CEI,” “Caesars,” “we,” “our,” or “us,” for the three and six months ended June 30, 2024 and 2023 should be read in conjunction with the unaudited consolidated condensed financial statements and the notes thereto and other financial information included elsewhere in this Form 10-Q as well as our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Annual Report”). Capitalized terms used but not defined in this Form 10-Q have the same meanings as in the 2023 Annual Report.
Previous wording
We own, lease, brand, or manage an aggregate of 53 domestic properties in 18 states with approximately 50,500 slot machines, video lottery terminals and e-tables, approximately 2,700 table games and approximately 45,000 hotel rooms as of March 31, 2024. In addition, we have other properties in North America that are authorized to use the brands and marks of Caesars Entertainment, Inc. Our primary source of revenue is generated by our casino properties’ gaming operations, our retail and online sports betting, and online gaming, and we utilize our hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to our properties.
Current wording
We own, lease, brand or manage an aggregate of 53 domestic properties in 18 states with approximately 51,000 slot machines, video lottery terminals and e-tables, approximately 2,800 table games and approximately 44,900 hotel rooms as of June 30, 2024. In addition, we have other properties in North America that are authorized to use the brands and marks of Caesars Entertainment, Inc. Our primary source of revenue is generated by our casino properties’ gaming operations, our retail and online sports betting and online gaming, and we utilize our hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to our properties.
Previous wording
We operate and conduct retail and online sports wagering across 31 jurisdictions in North America, 26 of which offer online sports betting. Additionally, we operate iGaming in five jurisdictions in North America. The map below illustrates Caesars Digital’s presence as of March 31, 2024:
Current wording
We operate and conduct retail and online sports wagering across 32 jurisdictions in North America, 26 of which offer online sports betting. Additionally, we operate iGaming in five jurisdictions in North America. The map below illustrates Caesars Digital’s presence as of June 30, 2024:
Previous wording
As of March 31, 2024, we have contributed a total of $7 million in cash contributions since inception of the joint venture, which include capital calls totaling $3 million in October 2023 that we elected to participate in. Additionally, we have contributed approximately 209 acres of land with a total fair value of approximately $69 million. We have no further obligation to contribute additional real estate or cash. During the year ended December 31, 2023, we recorded $64 million of income related to the investment, primarily due to the joint venture’s gain on the sale of a land parcel. As of both March 31, 2024 and December 31, 2023, our investment in the joint venture was $147 million and is recorded in Investments in and advances to unconsolidated affiliates on the Balance Sheets.
Current wording
We have contributed a total of $7 million in cash and approximately 209 acres of land with a total fair value of $69 million. We have no further obligation to contribute additional real estate or cash. During the year ended December 31, 2023, we recorded $64 million of income related to the investment, primarily due to the joint venture’s gain on the sale of a land parcel. As of both June 30, 2024 and December 31, 2023, our investment in the joint venture was $147 million and is recorded in Investments in and advances to unconsolidated affiliates on the Balance Sheets.
Previous wording
The presentation of financial information herein for the periods after our completed divestiture of Rio All-Suite Hotel & Casino (“Rio”) in the third quarter of 2023 is not fully comparable to the periods prior to such divestiture.
Current wording
The presentation of financial information herein for the periods after our completed divestiture of Rio All-Suite Hotel & Casino (“Rio”) at the end of the third quarter of 2023 is not fully comparable to the periods prior to such divestiture.
Previous wording
This MD&A is intended to provide information to assist in better understanding and evaluating our financial condition and results of operations. Our historical operating results may not be indicative of our future results of operations because of the factors described in the preceding paragraph and the changing competitive landscape in each of our markets, including changes in market and societal trends, as well as by factors discussed elsewhere herein. We recommend that you read this MD&A in conjunction with our unaudited Financial Statements and the notes to those statements included in this Quarterly Report on Form 10-Q.
Current wording
This MD&A is intended to provide information to assist in better understanding and evaluating our financial condition and results of operations. Our historical operating results may not be indicative of our future results of operations because of the factor described in the preceding paragraph and the changing competitive landscape in each of our markets, including changes in market and societal trends, as well as by factors discussed elsewhere herein. We recommend that you read this MD&A in conjunction with our unaudited Financial Statements and the notes to those statements included in this Quarterly Report on Form 10-Q.
Previous wording
Key performance metrics include volume indicators such as drop or handle, which refer to amounts wagered by our customers. The amount of volume we retain, which is not fully controllable by us, is recognized as casino revenues and is referred to as our win or hold. Slot win percentage is typically in the range of approximately 9% to 11% of slot handle for both the Las Vegas and Regional segments. Table game hold percentage is typically in the range of approximately 16% to 23% of table game drop in both the Las Vegas and Regional segments. Sports betting hold is typically in the range of 5% to 10% and iGaming hold typically ranges from 3% to 5%. In addition, hotel occupancy, which is the average percentage of available hotel rooms occupied during a period, is a key indicator for our hotel business in the Las Vegas segment. See “Results of Operations” section below. Complimentary and discounted rooms are treated as occupied rooms in our calculation of hotel occupancy. The key metrics we utilize to measure our profitability and performance are Adjusted EBITDA and Adjusted EBITDA margin.
Current wording
Key performance metrics include volume indicators such as drop or handle, which refer to amounts wagered by our customers. The amount of volume we retain, which is not fully controllable by us, is recognized as casino revenues and is referred to as our win or hold. Slot win percentage is typically in the range of approximately 9% to 11% of slot handle for both the Las Vegas and Regional segments. Table games hold percentage is typically in the range of approximately 16% to 23% of table games drop in both the Las Vegas and Regional segments. Sports betting hold is typically in the range of 5% to 10% and iGaming hold typically ranges from 3% to 5%. In addition, hotel occupancy, which is the average percentage of available hotel rooms occupied during a period, is a key indicator for our hotel business in the Las Vegas segment. See “Results of Operations” section below. Complimentary and discounted rooms are treated as occupied rooms in our calculation of hotel occupancy. The key metrics we utilize to measure our profitability and performance are Adjusted EBITDA and Adjusted EBITDA margin.
Previous wording
The following summary highlights the significant factors impacting our financial results for the three months ended March 31, 2024 and 2023:
Current wording
The following summary highlights the significant factors impacting our financial results for the three and six months ended June 30, 2024 and 2023:
Previous wording
•New Developments – During the construction of the permanent facilities for Caesars Virginia and Harrah’s Columbus Nebraska, we opened temporary gaming facilities during the second quarter of 2023. Caesars Virginia’s temporary facility opened on May 15, 2023 and the permanent facility is scheduled to open in December 2024. Harrah’s Columbus Nebraska’s temporary facility was opened on June 12, 2023 through March 20, 2024 when it was closed in anticipation of the permanent facility opening in May 2024.
Current wording
•New Developments – During the construction of the permanent facilities for Caesars Virginia and Harrah’s Columbus Nebraska, we opened temporary gaming facilities during the second quarter of 2023. Caesars Virginia’s temporary facility opened on May 15, 2023, and the permanent facility is scheduled to open in December 2024. Harrah’s Columbus Nebraska’s temporary facility was open from June 12, 2023, through March 20, 2024, closing in anticipation of the permanent facility which opened on May 17, 2024, following weeks of construction disruption due to weather.
Previous wording
•Caesars Sportsbook, Caesars Racebook and iGaming mobile apps – We continue to launch Caesars Sportsbook and Caesars Racebook in new jurisdictions, and our online and mobile iGaming application, Caesars Palace Online Casino, launched in the summer of 2023. As new states and jurisdictions have legalized sports betting, we have made varying degrees of upfront investments which have been executed through marketing campaigns and promotional incentives to acquire new customers and establish our presence in the new state or jurisdiction. During the three months ended March 31, 2024 and 2023, we increased our promotional spend with the launch of Caesars Sportsbook in North Carolina in March 2024 and Ohio and Massachusetts in January and March 2023, respectively. We adjust our level of investment during the launch period in new jurisdictions based, in part, on prior experience and do not expect such investment to continue at elevated levels subsequent to the initial launch periods.
Current wording
•Caesars Sportsbook, Caesars Racebook and iGaming mobile apps – We continue to launch Caesars Sportsbook and Caesars Racebook in new jurisdictions, and our online and mobile iGaming application, Caesars Palace Online Casino, launched in the summer of 2023. As new states and jurisdictions have legalized sports betting, we have made varying degrees of upfront investments which have been executed through marketing campaigns and promotional incentives to acquire new customers and establish our presence in the new state or jurisdiction. We adjust our level of investment during the launch period in new jurisdictions based, in part, on prior experience and do not expect such investment to continue at elevated levels subsequent to the initial launch periods. Furthermore, on June 18, 2024, we completed the acquisition of the operations of WynnBET’s Michigan iGaming business and long-term extension of iGaming market access rights with the Sault Ste. Marie Tribe of Chippewa Indians.
Previous wording
•Debt Transactions – During thethree months ended March 31, 2024 and 2023, we refinanced $4.4 billion of debt for both periods. See Liquidity and Capital Resources below for 2024 transaction. As a result of these transactions, we recorded loss on early extinguishment of debt on the Statements of Operations of $48 million and $197 million, for the three months ended March 31, 2024 and 2023, respectively.
Current wording
•Debt Transactions – During thesix months ended June 30, 2024 and 2023, we refinanced $4.4 billion of debt in both periods. In April 2024, Caesars Virginia, LLC entered into a new $425 million Caesars Virginia Delayed Draw Term Loan and Revolving Credit Facility and utilized$120 million as of June 30, 2024. In addition, we amended the CEI Credit Agreement andreduced the interest rate margin on the CEI Term Loan B in May 2024. Wemade a voluntary principal repayment of $100 million onour CEI Term Loan B in June 2024. See Liquidity and Capital Resources below for more detail related to 2024 transactions. As a result of these transactions, we recorded loss on early extinguishment of debt on the Statements of Operations of $3 million for the three months ended June 30, 2024 and $51 million and $197 million for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
•Economic Factors Impacting Discretionary Spending –Gaming and other leisure activities we offer represent discretionary expenditures which may be sensitive to economic downturns which impacts our customer mix differently. We also monitor recent trends, including higher inflation, interest rates, and global hostilities, and the related effects on travel, our customers, and our operations.
Current wording
•Economic Factors Impacting Discretionary Spending –Gaming and other leisure activities we offer represent discretionary expenditures which may be sensitive to economic downturns which impacts the behavior among the components of our customer mix differently. We also monitor recent trends, including higher inflation, interest rates, and global hostilities, and the related effects on travel, our customers, and our operations.
Previous wording
(a)Corporate and Other includes revenues related to certain licensing arrangements and various revenue sharing agreements. Corporate and Other Adjusted EBITDA includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees and other general and administrative expenses.
Current wording
(a)Corporate and Other includes revenues related to certain licensing arrangements and various revenue sharing agreements and includes eliminations of transactions among segments to reconcile to the Company’s consolidated results. Corporate and Other Adjusted EBITDA includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional fees and other general and administrative expenses.
Previous wording
(b)See the “Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the three months ended March 31, 2024 and 2023” discussion later in this MD&A for a definition of Adjusted EBITDA and a reconciliation of net income (loss) to Adjusted EBITDA.
Current wording
(b)See the “Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the three and six months ended June 30, 2024 and 2023” discussion later in this MD&A for a definition of Adjusted EBITDA and a reconciliation of net income (loss) to Adjusted EBITDA.
Previous wording
Consolidated comparison of the three months ended March 31, 2024 and 2023
Current wording
Consolidated comparison of the three and six months ended June 30, 2024 and 2023
Previous wording
Consolidated net revenues decreased for the three months ended March 31, 2024 primarily due to a decline in casino revenues in our Las Vegas segment driven by lower table game hold in addition to the decrease in gaming volume associated with the divestiture of Rio in the third quarter of 2023 and unfavorable timing of major city-wide conventions for the current quarter compared to the same prior year period. Additionally, our Regional segment was impacted by inclement weather in several of our regional property locations during the current quarter causing declines in gaming volume. These results were partially offset by improved performance in our Caesars Digital segment and net revenues generated from the opening of our temporary gaming facilities at Caesars Virginia and Harrah’s Columbus Nebraska during the second quarter in 2023.
Current wording
Consolidated net revenues decreased for the six months ended June 30, 2024, as compared to the same prior year period, due to a decline in casino revenues in our Las Vegas segment primarily driven by the decrease in gaming volume associated with the divestiture of Rio at the end of the third quarter of 2023. The Regional segment was negatively impacted by inclement weather in several of our property locations during the first quarter of 2024, the continued impact of competition associated with new casino resorts opening in some of our regional markets, and construction disruption from renovation projects at certain of our properties during the first half of 2024. These results were partially offset by net revenues generated from the opening of our temporary gaming facilities at Caesars Virginia and Harrah’s Columbus Nebraska during the second quarter of 2023, followed by the permanent facility of Harrah’s Columbus Nebraska in May 2024. Furthermore, Caesars Digital delivered strong revenue growth driven by higher hold in sports betting and a significant increase in iGaming volumes coupled with improved hold.
Previous wording
Casino expenses consist principally of salaries and wages associated with our gaming operations, gaming taxes and marketing and advertising costs attributable to our Caesars Digital segment. Food and beverage expenses consist principally of salaries and wages and costs of goods sold associated with our food and beverage operations. Hotel expenses consist principally of salaries, wages and supplies associated with our hotel operations. Other expenses consist principally of salaries and wages, costs of goods sold and professional talent fees associated with our retail, entertainment and other operations.
Current wording
Casino expenses consist principally of salaries and wages associated with our gaming operations, gaming taxes and marketing and advertising costs attributable to our Caesars Digital segment. Food and beverage expenses consist principally of salaries and wages and costs of goods sold associated with our food and beverage operations. Hotel expenses consist principally of salaries, wages and supplies associated with our hotel operations. Other expenses consist principally of salaries and wages, costs of goods sold associated with our retail operations, entertainment costs, including professional talent fees, and other operations.
Previous wording
Casino expenses increased for the three months ended March 31, 2024 as compared to the same prior year period in connection with increased revenues in our Caesars Digital segment. Additionally, our Las Vegas segment’s casino expenses increased for the three months ended March 31, 2024 due to promotional costs associated with special events held over the Super Bowl weekend. We continue to strategically manage our marketing and advertising spend to reduce our casino expenses related to our Caesars Digital segment. Food and beverage expenses have increased mainly due to higher union and non-union wages in addition to increased employee head count in our Las Vegas segment associated with new food and beverage offerings. We continue to focus on labor efficiencies to manage rising labor costs.
Current wording
Casino expenses increased for the six months ended June 30, 2024, as compared to the same prior year period, in connection with higher gaming taxes and software costs associated with increased revenues in our Caesars Digital segment, offset in part by lower gaming revenues in our Regional segment. We continue to strategically manage our marketing and advertising spend to reduce our casino expenses related to our Caesars Digital segment. Food and beverage expenses have increased mainly due to higher union and non-union wages in addition to increased employee head count in our Las Vegas segment associated with new food and beverage offerings. We continue to focus on labor efficiencies to manage increased labor costs.
Previous wording
General and administrative expenses include items such as information technology, facility maintenance, utilities, property and liability insurance, expenses for administrative departments such as accounting, compliance, purchasing, human resources, legal, internal audit, property taxes and marketing expenses indirectly related to our gaming and non-gaming operations.
Current wording
General and administrative expenses include items such as information technology, facility maintenance, utilities, property and liability insurance, expenses for administrative departments such as accounting, compliance, purchasing, human resources, legal, internal audit, property taxes and marketing expenses indirectly related to our gaming and non-gaming operations. General and administrative expenses decreased for the three and six months ended June 30, 2024, as compared to the same prior year periods, due to lower general advertising expenses and reduced rent expense related to the Rio which was divested at the end of the third quarter of 2023.
Previous wording
Depreciation and amortization expenses increased for the three months ended March 31, 2024 as compared to the same prior year period primarily related to recently completed construction projects.
Current wording
Depreciation and amortization expenses increased for the three and six months ended June 30, 2024 as compared to the same prior year period primarily related to recently completed construction projects.
Previous wording
Transaction and other costs, net for the three months ended March 31, 2024 primarily includes non-cash losses on the write down and disposal of assets and non-cash changes in equity method investments. Transaction and other costs, net for the three months ended March 31, 2023 primarily includes pre-opening costs in connection with new property openings, professional services for integration activities and non-cash changes in equity method investments.
Current wording
Transaction and other costs, net for the three and six months ended June 30, 2024 primarily includes non-cash losses on the write down and disposal of assets and non-cash changes in equity method investments. Transaction and other costs, net for the three and six months ended June 30, 2023 primarily includes pre-opening costs in connection with new property openings, professional services for integration activities and non-cash changes in equity method investments.
Previous wording
Interest expense, net decreased for the three months ended March 31, 2024, as compared to the same prior year period primarily due to a decrease of interest expense related to debt service from our efforts to reduce outstanding debt and additional capitalized interest resulting from the ongoing construction of our new permanent facilities. This was slightly offset by the increase from the annual rent escalator associated with our VICI Leases.
Current wording
Interest expense, net increased for the three and six months ended June 30, 2024, as compared to the same prior year period primarily due to the annual rent escalator associated with our VICI Leases. Interest expense associated with our debt instruments is also slightly higher due to our debt mix, partially offset by our continuing efforts to reduce outstanding debt. An increase in capitalized interest resulting from ongoing construction projects, including our new developments, has also offset the increase in total interest expense.
Previous wording
For the three months ended March 31, 2024, loss on extinguishment of debt was primarily related to the prepayments of the CEI Senior Secured Notes due 2025 and the Caesars Resort Collection (“CRC”) Senior Secured Notes. For the three months ended March 31, 2023, loss on extinguishment of debt was primarily related to the prepayments of the CRC Term Loan and the CRC Incremental Term Loan.
Current wording
For the six months ended June 30, 2024, loss on extinguishment of debt was primarily related to the prepayments of the CEI Senior Secured Notes due 2025 and the Caesars Resort Collection (“CRC”) Senior Secured Notes and the partial prepayment of the CEI Term Loan B. For the six months ended June 30, 2023, loss on extinguishment of debt was primarily related to the prepayments of the CRC Term Loan and the CRC Incremental Term Loan.
Previous wording
Other income for the three months ended March 31, 2024 primarily represents a change in estimate of our disputed claims liability.
Current wording
Other income (loss) for the six months ended June 30, 2024 primarily represents a change in estimate of our disputed claims liability.
Previous wording
The income tax provision for the three months ended March 31, 2024 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to an increase in federal and state valuation allowances against the deferred tax assets for excess business interest expense.
Current wording
The income tax provision for the three and six months ended June 30, 2024 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to an increase in federal and state valuation allowances against the deferred tax assets for excess business interest expense.
Previous wording
The income tax benefit for the three months ended March 31, 2023 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to state deferred tax benefits generated from net operating losses becoming available due to elections to treat certain subsidiary corporations as disregarded entities for income tax purposes.
Current wording
The income tax benefit for the three and six months ended June 30, 2023 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to the partial release of federal and state valuation allowances.
Previous wording
Segment comparison of the three months ended March 31, 2024 and 2023
Current wording
Segment comparison of the three and six months ended June 30, 2024 and 2023
Previous wording
Our Las Vegas segment’s net revenues, net income, Adjusted EBITDA, and Adjusted EBITDA margin decreased for the three months ended March 31, 2024, as compared to the same prior year period. Net revenues were negatively impacted by lower casino volumes associated with the divestiture of Rio in the third quarter of 2023 and unfavorable timing of major city-wide conventions for the current quarter compared to the same prior year period. In addition, table game hold decreased significantly from the high end of our typical range for the same prior year period to the lower end of our expected range. The Las Vegas segment was also negatively impacted by higher operating costs associated with (a) higher union and non-union wages, (b) increased employee head count associated with new food and beverage offerings and (c) increased promotional costs associated with special events held over the Super Bowl weekend. Other revenue decreased primarily due to lower entertainment revenues from a reduction in headliner performances in the current quarter, compared to the same prior year period.
Current wording
Our Las Vegas segment’s net revenues, net income, Adjusted EBITDA and Adjusted EBITDA margin decreased for the six months ended June 30, 2024, as compared to the same prior year period. Net revenues were negatively impacted by lower casino volumes associated with the divestiture of Rio. The Las Vegas segment was also negatively impacted by higher operating costs associated with (a) higher union and non-union wages, (b) increased employee head count associated with new food and beverage offerings and (c) increased promotional costs associated with special events held over the Super Bowl weekend.
Previous wording
For the three months ended March 31, 2024, slot win percentage in the Las Vegas segment was within our typical range.
Current wording
For the three and six months ended June 30, 2024, slot win percentage in the Las Vegas segment was within our typical range.
Previous wording
Our Regional segment’s net revenues decreased slightly for the three months ended March 31, 2024, as compared to the same prior year period, primarily due to inclement weather in several of our regional property locations that negatively impacted visitor volume. The Regional segment has also experienced declines in gaming volume from a shift in customer mix as our higher rated play has remained steady with some growth, offset slightly by a reduction in lower tiered and unrated play. Additionally, the continued impact of competition associated with new casino resorts opening in some of our regional markets and ongoing construction disruption from renovation projects at certain of our properties within the segment contributed to the decline in casino revenues. These negative factors were partially offset by the opening of our temporary gaming facilities at Caesars Virginia and Harrah’s Columbus Nebraska during the second quarter in 2023.
Current wording
Our Regional segment’s net revenues decreased for the three and six months ended June 30, 2024, as compared to the same prior year period, primarily due to inclement weather in several of our regional property locations that negatively impacted visitor volume in the first quarter of 2024. Additionally, the continued impact of competition associated with new casino resorts opening in some of our regional markets and ongoing construction disruption from renovation projects at certain of our properties within the segment contributed to the decline in net revenues. The Regional segment has also experienced declines in gaming volume resulting from a shift in customer mix as our higher rated play has remained steady with some growth, partially offset by a reduction in unrated play. Moreover, Regional hotel revenues benefited from a national tournament that drove visitation to the northern Nevada region in the second quarter of 2023. The impact of these unfavorable factors were partially offset by the incremental revenues attributable to our temporary gaming facilities at Caesars Virginia and Harrah’s Columbus Nebraska that opened during the second quarter in 2023. The permanent facility of Harrah’s Columbus Nebraska opened in May 2024 following the closure of the temporary facility in March 2024.
Previous wording
Slot win percentage in the Regional segment for the three months ended March 31, 2024 was within our typical range.
Current wording
Slot win percentage in the Regional segment for the three and six months ended June 30, 2024 was within our typical range.
Previous wording
(a)Includes total promotional and complimentary incentives related to sports betting, iGaming, and poker of $86 million and $77 million for the three months ended March 31, 2024 and 2023, respectively. Promotional and complimentary incentives for poker were $3 million and $4 million for the three months ended March 31, 2024 and 2023, respectively.
Current wording
(a)Includes total promotional and complimentary incentives related to sports betting, iGaming, and poker of $62 million and $55 million for the three months ended June 30, 2024 and 2023, respectively, and $148 million and $132 million for the six months ended June 30, 2024 and 2023, respectively. Promotional and complimentary incentives for poker were $3 million for both the three months ended June 30, 2024 and 2023 and $6 million and $7 million for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
(b)Caesars Digital generated an additional $279 million and $328 million of sports betting handle for the three months ended March 31, 2024 and 2023, respectively, which is not included in this table, for select wholly-owned and third-party operations for which Caesars Digital provides services and we receive all, or a share of, the net profits. Hold related to these operations was 9.8% and 10.4%, for the three months ended March 31, 2024 and 2023, respectively. Sports betting handle includes $11 million and $12 million for the three months ended March 31, 2024 and 2023, respectively, related to horse racing and pari-mutuel wagers.
Current wording
(b)Caesars Digital generated an additional $199 million and $212 million of sports betting handle for the three months ended June 30, 2024 and 2023, respectively, and $478 million and $540 million for the six months ended June 30, 2024 and 2023, respectively, which is not included in this table, for select wholly-owned and third-party operations for which Caesars Digital provides services and we receive all, or a share of, the net profits. Hold related to these operations was 9.4% and 10.9%, for the three months ended June 30, 2024 and 2023, respectively, and 9.6% and 10.6% for the six months ended June 30, 2024 and 2023, respectively. Sports betting handle includes $11 million and $12 million for the three months ended June 30, 2024 and 2023, respectively, and $22 million and $24 million for the six months ended June 30, 2024 and 2023, respectively, related to horse racing and pari-mutuel wagers.
Previous wording
Sports betting and iGaming hold percentages in the Caesars Digital segment for the three months ended March 31, 2024 were within our typical range.
Current wording
Sports betting and iGaming hold percentages in the Caesars Digital segment for the three and six months ended June 30, 2024 were within our typical range.
Previous wording
Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the Three Months Ended March 31, 2024 and 2023
Current wording
Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the Three and Six Months Ended June 30, 2024 and 2023
Previous wording
The following tables summarizes our Adjusted EBITDA for the three months ended March 31, 2024 and 2023, respectively, in addition to reconciling net income (loss) to Adjusted EBITDA in accordance with GAAP (unaudited):
Current wording
The following tables summarizes our Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023, respectively, in addition to reconciling net income (loss) to Adjusted EBITDA in accordance with GAAP (unaudited):
Previous wording
(a)Other income for the three months ended March 31, 2024 primarily represents a change in estimate of our disputed claims liability.
Current wording
(b)Other (income) loss for the six months ended June 30, 2024 primarily represents a change in estimate of our disputed claims liability.
Previous wording
(b)Transaction costs and other, net primarily includes costs related to non-cash losses on the write down and disposal of assets, professional services for transaction and integration costs, various contract exit or termination costs, pre-opening costs in connection with our temporary facility openings, and non-cash changes in equity method investments.
Current wording
(d)Transaction costs and other, net primarily includes costs related to non-cash losses on the write down and disposal of assets, professional services for transaction and integration costs, various contract exit or termination costs, pre-opening costs in connection with our temporary facility openings, and non-cash changes in equity method investments.
Previous wording
(c)Adjustment for pre-disposition results of operations reflecting the subtraction of results of operations for Rio prior to divestiture on October 2, 2023. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company’s auditors for the periods presented. The additional financial information is included to enable the comparison of current results with results of prior periods.
Current wording
(e)Adjustment for pre-disposition results of operations reflecting the subtraction of results of operations for Rio prior to divestiture at the end of the third quarter of 2023. Such figures are based on unaudited internal financial statements and have not been reviewed by the Company’s auditors for the periods presented. The additional financial information is included to enable the comparison of current results with results of prior periods.
Previous wording
As of March 31, 2024, our cash on hand and revolving borrowing capacity was as follows:
Current wording
As of June 30, 2024, our cash on hand and borrowing capacity was as follows:
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Additionally, on May 17, 2024, we opened the permanent facility of Harrah’s Columbus Nebraska which is a casino featuring a new one-mile horse racing surface, a 40,000-square-foot-casino and sportsbook with more than 400 slot machines and 20 table games, as well as a restaurant and retail space.