At A Glance: Third Quarter Las Vegas Casino Earnings Highs And Lows

Written By Marc Meltzer on November 5, 2018

Publicly held casino corporations report earnings every quarter. The information shared is usually to provide stock analysts and traders with information to buy stocks. The higher stock prices go, the more valuable the businesses are.

For better and worse, Las Vegas casinos are mostly operated by corporations. These earnings reports often have casino operators sharing information to the public that they’d usually keep to themselves. Those are sometimes the most interesting parts of earnings releases.

Looking back at how a company performed in the past can sometimes give an indication of what customers can expect in the future. Here are a few newsworthy items from five casino corporations with properties in Las Vegas that have already reported earnings.

Caesars Entertainment

Caesars Entertainment has been in flux since emerging from bankruptcy last year. Their earnings report addressed a couple of those topics.

First, they announced that CEO Mark Frissora will be leaving the company. He’ll remain with the company until February 8, to help the transition. The company also announced they will not merge with the Golden Nugget.

The most useful information from their earnings might be that visitation to Las Vegas slowed in the third quarter. In an effort to increase visitation in the fourth quarter, Caesars has been offering more discounts and complimentary rooms to Total Rewards customers.

Caesars is expecting to see 50,000 more room nights in the fourth quarter than last year because of these efforts. They can flip this switch whenever they see a slowdown coming.

MGM Resorts

MGM Resorts has much more happening than the expansion of sports betting around the country.

There’s been a lot of talk about fees in Las Vegas but that seems to be affecting only one type of customer for MGM Resorts. Large groups and convention guests are less concerned about fees since they’re not paying for the extra expenses like people on vacation.

While the fees impact vacationers greatly, Las Vegas rates are still less than other convention destinations. MGM Resorts will continue to focus on this customer that will spend more than people on vacation.

The bottom line here is to expect the fees to continue until the number of business travelers to Las Vegas slows down drastically.

Las Vegas Sands (The Venetian/The Palazzo)

Despite having Las Vegas in the company name, the majority of their business happens overseas.

Las Vegas Sands is a luxury property and doesn’t face the same issues that affect MGM and Caesars. Even though they have a different customer, The Venetian saw a dip in visitation. Occupancy in the third quarter was 97 percent in 2017 and dipped to 94 percent this year.

Even though they had fewer customers, Sands didn’t discount their rooms too much. The average daily room rate at The Venetian only fell $2 in the quarter. Guests paid on average $225 per night this year as opposed to $227 last year.

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Boyd Gaming

Boyd Gaming’s Las Vegas casinos are located in downtown and away from the Vegas Strip. The latter properties are considered casinos for local Las Vegas residents as well as tourists.

The properties for Boyd Gaming have been profitable for 14 consecutive quarters (3.5 years).

As visitors scour for less expensive hotel options, earnings have been strong all year for Boyd Gaming and its value-priced hotels. Even though business was strong in downtown Las Vegas casinos in the third quarter, their overall earnings dipped slightly due to lower visitation. The company expects to bounce back moving forward.

Penn National Gaming

This national casino operator has two properties in Las Vegas. Penn National Gaming generated record third-quarter income led by their Las Vegas properties Tropicana and M Resort.

The company has been busy expanding around the country and those new casinos will become feeder markets for Las Vegas.

Penn National expects to see overall visitation to Las Vegas to increase. They expect their new properties around the country to expand their marketing database and drive traffic to their properties in Las Vegas.

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Marc Meltzer

Marc grew up on the mean streets of the South Bronx. He's the rare combination of Yankees and Jets fan which explains his often contrarian point of view. Marc is a freelance writer and social media consultant. Writing about steak, booze, gambling and Las Vegas is a tough job but somebody has to do it.

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