Caesars Entertainment is close to selling one of its Las Vegas Strip resorts, is not interested in New York for now, and is pondering the next move for its non-gaming hotel in Dubai, according to comments made by CEO Tom Reeg during the operator’s fourth-quarter earnings call.
“We expect to sell a major Strip asset and launch that process in early 2022,” Reeg said, according to CDC Gaming Reports. “That it is in motion and the next time we talk to you about a Strip asset sale it will be to announce that sale.”
Speculation by analysts over the past few weeks points to Planet Hollywood as the most likely asset Caesars will unload, with the Flamingo Las Vegas also a possibility. The real estate investment trust VICI Properties has right of first refusal in a sale of one of the properties.
With proceeds from the pending asset sale, “we can invest in digital and (ongoing) projects that are going to generate significant returns and we can significantly de-lever this year,” Reeg said. “We expect to accomplish all of that and we’re excited to keep the momentum going in 2022.”
Reeg said a sale would shed up to 4,000 rooms, Caesars down to 16,000 to 17,000 rooms in the market.
“That’s a quarter of our capacity, so it will clearly have an impact on our ability to yield the remaining rooms,” Reeg said. “Part of this is, where do those rooms come out of our system? You should expect that to be a factor in terms of how we decide which (casino) to divest.”
As for the operator’s near future plans, Reeg said Caesars is not interested in pursuing one of the three casino licenses up for bid in the New York City region, calling New York a “difficult regulatory state.”
“It won’t be enough to pick a site and build a casino,” he said. “There have to be other investments there as well. I would say on our balance sheets, it is extraordinarily unlikely we make a material investment in New York land-based…
“Away from New York, we’re doing the Columbus, Nebraska, project, which is a very small tract in the middle of the state that helped us get into digital there. There are other things kicking around that might be interesting, but it’s unlikely that greenfield new license activity becomes a huge stock of our time from Caesars standpoint.”
Meanwhile, he said, the operator is contemplating what’s next for Caesars Palace Dubai, the non-gaming hotel it opened with an eye toward casino gaming being legalized.
“In Dubai, if there’s an opportunity, you should expect we would be active, because our brand and building are already open,” Reeg said.
Caesars is also partnered with Clairvest Neem Ventures in Wayakama, Japan to run the gaming operations at that integrated resort, should it receive the necessary license from the government. Reeg did not mention that project during his comments.
