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Caesars won't sell Strip casino this year, Rumor Mill asks for differences

Published: May 4, 2021, 10: 24 hrs.

Last updated: May 4, 2021, 10: 31 h.

Todd Shriber

Caesars Entertainment (NASDAQ: CZR) announced solid first-quarter results on Tuesday, while Las Vegas weekends "are sold out for the foreseeable future " according to CEO Tom Reega, but the operator will not unload any of its Sin City properties this year.

Caesars Las Vegas
Caesars CEO Tom Reeg in CNBC interview last month. He says the company will not sell its Las Vegas assets until 2022. (Photo: CNBC )

The nation's largest gaming company by number of properties posted earnings before interest, taxes, depreciation and amortization (EBITDA) of million in the first three months of the year. Reeg added that it is likely that the Flamingo operator will earn at least $1 billion in one of this year's four quarters.

However, Caesars will not join the growing list of recent Las Vegas casino sales, including Palms and Tropicana.

We believe there's no point in selling an asset until we can sell it beyond the cash flow we're making with it, not a bridge to what we think we can do with it, "Reeg said on a conference call with analysts. "That suggests that this is a 2022 marketing and sales event that ends once the license is issued."

One of the assets the company has confirmed is for sale are William Hill's UK betting shops and European online casinos and sports betting. Chief Financial Officer Bret Yunker said the company plans to reduce debt by $2 billion over the next year, assuming a "conservative" sale price for William Hill's assets. Caesars expects to announce a buyer in the third or fourth quarter.

Caesars Las Vegas Rumors Going Strong

The idea of Caesars parting with one or two Strip assets goes back nearly two years, when Eldorado Resorts announced plans to take over the "old Caesars" - revealing that it may sell one or two Las Vegas casinos within 12 or 18 months of closing that deal.

The marriage was consummated last July during a coronavirus pandemic that is depressing the value of gaming-related real estate. Of the Las Vegas venues that changed hands this year, only the Venetian and Sands Expo and Convention Center sold at premium-like prices.

That doesn't prevent the rumor mill from spinning. A source requesting anonymity said Paris Las Vegas and Planet Hollywood Resort & Casino may already be up for sale. Reeg disagrees with that.

"And I should say I read a few more rumors, a different flavor this quarter. There are no active asset discussions in Las Vegas as I sit here today, "said the CEO of Caesars during a phone call.

Something to the Chatter

It is not an exaggeration to assume that when he decides to sell the assets or Strip assets, Caesars may part ways with Paris and Planet Hollywood .

When Eldorado moved to Caesars in 2019, it reached an agreement with VICI Properties (NYSE: VICI) for preemptive rights to buy one of the Flamingo Las Vegas, Bally's Las Vegas, Paris and Planet Hollywood. If a deal is reached for one of these venues, LINQ Hotel & Casino will be added to the remaining group for a possible second transaction.

Rumors of Planet Hollywood's presence at the auction surfaced in February , but related talk has since subsided.

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