Vegas Is Quiet But the Slots Are Humming at Local Casinos

(Bloomberg) -- Casinos in cities such as Tunica, Mississippi, and Council Bluffs, Iowa, are doing much better than those in Las Vegas, according to early results released Tuesday by Caesars Entertainment Corp.

Caesars properties in the so-called regional markets, which also include Louisiana and Missouri, saw revenue gain as much 2% through June 10, a surprise given the challenge of reopening during a pandemic. And operating income at those resorts rose as much as 70% compared with a year ago, helped by lower staffing levels.

It was a different story in Nevada, America’s gambling capital, where revenue at Caesars properties was down as much as 58% and the casinos were unprofitable, the company said.

“It’s premature to draw any conclusions about financial performance” in Las Vegas, Caesars spokesman Richard Broome said via email, because only three properties there had been open for less than a week through June 10. The regional properties generally had been open longer.

Roth Capital Partners analyst David Bain, in a research note Tuesday, noted the short opening time but said the Las Vegas performance was weak. The results will likely continue a debate on whether there is pent-up demand for betting and a willingness by gamblers to go to destination resorts, he said.

“I think we’re looking at some time next year for more fly-in travel,” he said in an interview.

Encouraging Trends

Hotel-demand trends in Las Vegas are “encouraging and accelerating,” leading Caesars to decide to open another Las Vegas property, Paris, this week, Broome said.

All of the nation’s 989 casinos closed due to the coronavirus, according to the American Gaming Association, but two-thirds have since reopened. Some states, including Louisiana and Mississippi, began reopening in May. Nevada began welcoming guests June 4.

Las Vegas is a largely airline-dependent destination, welcoming nearly 43 million guests in 2019. Regional casinos typically cater to customers who drive a few hours or less to the properties.

More than half of Las Vegas casino visitors currently are coming from within the state of Nevada, according to data from Orbital Insight, which tracks mobile-phone data. Californians make up the largest share of out-of-state visitors.

Eldorado Resorts Inc., which is in the process of acquiring Caesars, said Monday that it plans to issue new shares, sell some Las Vegas real estate and take other steps to strengthen its finances ahead of the $17 billion transaction.

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