Casino companies, whether they are large enough to be national or whether they cater to the so-called locals, continue to struggle to improve on last year’s performance. Red ink continued to flow at the Las Vegas Strip’s two most prominent operators…Caesars Entertainment Corp. (CZR) and MGM Resorts International (MGM).
Caesars Entertainment Chairman and CEO Gary Loveman explained it succinctly with the comment that “difficult economic conditions led to lower visitation in several regions, impacting our core operating results in the second quarter.”
The company saw its second quarter losses increase from last year’s $155 million or $1.24 per share to $241.7 million or $1.93 per share in the most recent quarter. Revenue during the period increased to $2.17 billion from last year’s $2.16 billion.
But, one of the problems, explained Loveman, is that casino visitors are bringing less cash during their visits.
Plaguing the company is its high debt position. The company owes nearly $20 billion and will have to restructure some $9 billion by 2016.
A spokesman for the company said, “We retired more than $5 billion of debt and pushed out maturities until 2015” since the company was taken private by the partnership of Apollo Global Management LLC and TPG Capital.
But, said Loveman, “The world since April or May has gotten more difficult. There’s trepidation on the part of consumers to spend at the rate they have historically.”