Caesars Entertainment Inc (CZR)

Digital EBITDAR Targets
Q: Are you on track for $500 million EBITDAR in digital?
A: Yes, we're on pace for $200 million this year, with 30% top-line growth and 50% flow-through. - The roll-off of partnership contracts will contribute to reaching the $500 million target we've discussed for three years - ,. -

Las Vegas Margin Sustainability
Q: What drives strong Las Vegas margins; are they sustainable?
A: We have pricing power in Las Vegas, raising prices across rooms, restaurants, and amenities due to massive demand - ,. - Despite $76 million in headwinds since Q2 2022, our EBITDA is down only $30 million, showcasing operational efficiency. - We expect margins to remain strong as our promotional approach hasn't changed. -

Impact of Union Contract Costs
Q: Will union contract costs impact Q3 results?
A: The incremental costs from the culinary union contract are minimal in Q3. - The next escalator is in October, so we don't expect a significant impact until then. -

Regional Market Outlook
Q: Will regional performance decline similarly in Q3?
A: Yes, we anticipate similar headwinds in Q3 as in Q2, due to New Orleans disruption, competitive openings, and Reno group business impact. - Growth should return in Q4 as projects open and disruptions ease. -

M&A and Capital Allocation
Q: What's your M&A stance given stock price?
A: We're not issuing stock at current prices for M&A - ; instead, we'll start buying back stock as free cash flow increases. - We don't plan to sell operating casino assets but may monetize non-core, non-operating assets. -

WSOP Financial Impact
Q: How did WSOP contribute financially?
A: This was our best WSOP ever financially, benefiting hotel, gaming, and F&B. - WSOP generates $20–$25 million in annual EBITDA. -

Hotel Pricing Power
Q: Is room rate growth sustainable?
A: Yes, we've continued to raise prices due to strong demand, with little price elasticity. - This leads to higher EBITDA as both gaming and non-gaming revenues grow. -

Digital Volume and Profitability
Q: Can digital growth continue without volume increase?
A: We've shifted to more profitable customers by reducing broad promotions. - While volumes dropped, profitability increased. We expect revenue growth to accelerate as prior actions are lapped, with volume growth resuming. -

Digital Customer Acquisition Costs
Q: Are CAC trends changing in digital?
A: Recently, sports betting CAC has dropped significantly. - We expect spend to increase in Q3 and Q4 with football season, but don't see a material change in CAC trends. -

Vegas EBITDA Growth Expectations
Q: Will Vegas EBITDA grow year-over-year?
A: We expect Vegas to grow in the second half, but full-year EBITDA growth requires a favorable swing in hold. -

Unrated Play Decline
Q: Is the decline in unrated play widespread?
A: The decline is more pronounced in areas with new competition. - In those properties, unrated play declines more due to competitive openings. -

Potential VICI Transaction
Q: Will VICI exercise their option, and use of proceeds?
A: It's VICI's option to call the real estate under the Indianapolis assets; we won't exercise our put. - If exercised, proceeds (~$2.2 billion) would mostly pay down debt, with some capital return. -

Expenses and Margin Outlook
Q: Can expense efficiencies and margins be maintained?
A: Efficiencies result from numerous small initiatives. - We expect margins to hold up, excluding seasonality, despite significant labor cost increases in Vegas. -

Group Bookings Strength
Q: What's the outlook for group bookings in Vegas?
A: We're seeing mid-single-digit growth above this year, with mix moving to the mid-teens for the market. - Future bookings have strengthened considerably in the last few months. -

Vegas Property Performance
Q: Are non-luxury properties underperforming?
A: No, all properties are performing similarly. - Caesars Palace has more volatility due to high-end gaming, but visitation and pricing power are consistent across the portfolio. -

Impact of Mirage Closure
Q: Does Mirage closure help your properties?
A: It's a mixed bag. - We may gain from reduced room supply but lose some benefits as Mirage served as a feeder to our nearby properties. -

Illinois OSB Tax Increase
Q: How does Illinois OSB tax hike affect you?
A: Impact to us is under $5 million annually; we don't plan to change behavior. - If competitors adjust due to greater impact, it could benefit us, but no significant changes are observed yet. -

Horseshoe Casino Digital Launch
Q: Will launching Horseshoe Casino impact digital margins?
A: No, launch costs won't erode flow-through. - We're launching state by state, starting with Michigan in September. - While Horseshoe is a strong brand, Caesars Palace remains our flagship app. -

Sports Sponsorship Obligations
Q: Can you reduce sports sponsorship expenses if needed?
A: Yes, many deals signed in 2021 are rolling off, with significant pieces maturing by early 2026. - We expect substantial savings that will flow directly to the bottom line. -

Expense Focus Across Segments
Q: What's behind recent expense efficiencies?
A: There isn't one big initiative; it's numerous small efforts across revenue and expense items. - This reflects our ongoing focus on operational efficiency. -

Promotional Strategy in Regionals
Q: Are you adjusting promotions in regional markets?
A: No, our promotional profile hasn't changed. - We focus on EBITDA rather than gross gaming revenue, and see no need to respond to competitor promotions. -