Eldorado Resorts and Caesars Entertainment, headed for the finalization of their merger later this year, saw revenues fall considerably in the first quarter amid coronavirus-related casino closures.
Not surprisingly, with all of their physical locations shuttered in the last two weeks of March in the wake of the coronavirus pandemic, both companies saw their revenues fall by double-digit percentages in the first quarter.
Caesars and Eldorado announced their intent to merge last year in a $17.3 billion deal. The combined company, falling under the Caesars brand, will bring together dozens of casinos in North America under one corporate umbrella.
Caesars Entertainment outlined its figures for the first quarter (January to March 2020) in a release. Its net revenues decreased 13.6% to $1.83 billion and its operational losses were $66 million. In the same time period in 2019, Caesars had an operational net income of $240 million.
Caesars shut down all of its casinos in North America on March 17 to comply with government orders to slow down the spread of coronavirus. Before then, Caesars properties were performing well; net revenue through the end of February was up 12% over the first two months of 2019, according to the company release.
In addition to its physical locations, Caesars also has online casino and online sportsbook operations in New Jersey, where it carries hundreds of slots, roulette games and video poker. Caesars has 38,000 slot machines and 2,700 table games among its combined physical locations, according to a Wall Street Journal story.
Like Caesars, Eldorado Resorts had been performing well financially early in 2020 before the COVID-19 crisis struck.
Eldorado revenues were up 6.6% through February and its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) had risen 24% in a year-over-year comparison, CEO Tom Reeg said in a statement.
But after casino closures took hold in the last couple of weeks in March, Eldorado saw its total net revenue fall to $473.1 million, compared to $635.8 million in Q1 of 2019. Operating income, which was at $123.6 million in the first quarter of 2019, ran more than $123 million in the red for Q1 of 2020.
“We were encouraged by the strength of the consumer and the pace of revenue growth for this two-month period,” Reeg said. “However, the strength in January and February was offset by COVID-19 related weakness due to the mandated closure of all our properties by March 18, 2020.”
Eldorado has about 23,900 slot machines at its combined locations, according to the Wall Street Journal. That story also said that Reeg told industry analysts on Monday that he expects the merger with Caesars to be completed in June.
Eldorado received regulatory approval for the merger deal from Louisiana, Pennsylvania and Illinois early this year.