Caesars, MGM: Recovery slow but promising

Caesars Entertainment CEO Tom Reeg sat down with JP Morgan analysts to discuss the state of the Roman Empire. In a sentence, better than you might expect. On the Las Vegas Strip “weekend demand has been strong, but weekday demand remains a challenge,” reported analyst Daniel Politzer. Labor Day was good for business, with 95% occupancy. Meeting restrictions and “slowly grinding” air traffic impede midweek business for the moment. The revenue mix is normalizing, with gambling down from 50% during summer toward the usual 35% or 40%. Sports betting is bringing in a different-from-usual customer, and both terrestrial sportsbooks and online betting are profitable. Still, Reeg seems to have few illusions as to what he’s up against. “Management sees its most formidable competitors as FanDuel and DraftKings (proven ability to convert DFS into sports betting customers), PENN/Barstool (strong/engaged Barstool audience), and possibly MGM/GVC … CZR feels good about its market access, will continually be upgrading/improving its technology, and aims to give more detail on its plan for its brand/unlocking value by year-end.”