Casino operator Caesars Entertainment Corp. posted a smaller loss for its fiscal second quarter on Monday, but results still missed expectations, as slots and tables drew fewer gamblers.
Caesars owns or manages more than 50 casinos, most of them in the U.S. and Britain.
The company saw casino revenue decline by $116.8 million, or 7.5 percent. CEO Gary Loveman said food and beverage sales may ultimately replace those dollars.
Caesars attributed the drop in gambling revenue to fewer patrons. The company also pointed to increased competition in regional markets, as states open the door to commercial gambling, and the elimination of some less profitable marketing strategies.
Loveman, a former Harvard professor, has made a name for himself with innovative loyalty programs that encourage customers to keep coming back.
Casino patrons, especially younger ones, are increasingly turning away from gambling, and Las Vegas moguls are attempting to make up the difference with lavish nightclubs, decadent restaurants and boutique hotels.
Caesars opened the upscale Nobu Hotel within the sprawling Caesars Palace casino this year, and is in the process of transforming Bill’s Gamblin’ Hall & Saloon into the luxury Gansevoort Las Vegas and building Linq, a new project designed to appeal to Gen Xers.
Caesars said that its net loss for the three months ended June 30 shrank 12 percent, to $212.2 million, or $1.69 per share, from $241.7 million, or $1.93 a share, last year. Revenue edged down to $2.16 billion, from $2.16 billion in the 2012 second quarter.
Analysts had expected a smaller loss of $1.40 per share on higher revenue of $2.18 billion, according to FactSet.
In addition to its Las Vegas and Atlantic City, N.J., resorts, Caesars operates properties in Indiana, Louisiana and several other states. U.S. casinos have struggled since the recession, however, and Caesars is the only major U.S. casino company without a presence in the Chinese gambling enclave of Macau. Rival gambling companies Wynn Resorts Ltd. and Las Vegas Sands both reported gains for the first three months of the year, helped by their lucrative Macau properties.
Shares of Caesars Entertainment ended regular trading up 10 cents, at $15.58. The stock was unchanged in aftermarket trading following the report. Shares have more than doubled since the beginning of this year.
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