Casino operator Eldorado Resorts says its “100% focused” on finalizing its purchase of rival Caesars Entertainment, which could be the reason for its operating income dropping almost one-third in Q4.
The Reno-based Eldorado reported on Wednesday, that its revenue in the last three months of 2019 dropped almost 12% year-on-year to $592m, while operating income fell 32% to $59m and the company recorded a net loss of $13.2m for the quarter. In Q4, all five of the company’s geographic regions suffered losses, with the biggest falls in the East and South.
On a same-store basis, which overlooks Eldorado’s continually shifting asset portfolio, Q4 revenue decreased 4.4%, adjusted earnings rose 0.4% to $146.2m and operating income declined 32.2%.
Full-year revenue grew 23% to $2.52b, operating income increased 32.2% to $410m, adjusted earnings rose 35% to $697.5m but net income dropped 15% to $81m.
As reported by calvinayre.com, Eldorado CEO Tom Reeg called 2019 “an extremely active and productive year” for his company, which comprised the launch of sports betting operations in Iowa and Indiana. Last year, the company also closed the sale of multiple properties for a total of $564m.
This divestment spree lasted through Q4 and into the new year, partly to ease regulatory worries over ownership concentration prior to the Caesars merger.
Once their union is complete, Eldorado is also said to be eager to sell off some of Caesars’ Las Vegas Strip properties.
Reeg told analysts that he hopes to close the Caesars deal “early second quarter of this year.” Reeg said there was “absolutely zero risk on the financing side” and the contract was “going to be a home run for all of our stakeholders.”
Reeg kidded with analysts concerning which Caesars assets he might be thinking of unloading, saying he had to “wait for the next Bloomberg article … to see what I’m doing there.”
Reeg did inform that several Eldorado properties would undergo rebranding after the merger owing to the strength of the Caesars brands. The actual Caesars name would possibly adorn Eldorado’s “highest end properties, but I would expect to see a lot of our assets change into Horseshoe or Harrah’s over time.”
As for new sports betting offerings in legal gambling states, Reeg said Eldorado’s experience reverberated that of its rivals, in that “every property that has a sportsbook that did not before has seen increased visitation and volumes.”
Prior to the Caesars acquisition, Eldorado signed an exclusive betting and iGaming contract with UK bookmaker William Hill , and Reeg was asked how Hills’ operations will be combined with Caesars’ current sports betting operations. Reeg said “we’re not driven by the ego of who controls it,” so the priority is “to be thoughtful and put it together in the right fashion.”