The announcement was made during the company’s third quarter conference call with shareholders speculation over a potential Rio sale has been ongoing for the better part of a decade until Caesars sold it to a firm owned by Dreamscape Companies, owned by Eric Birnbaum, a New York developer, for $516.3 million in 2019.
The lease agreement between the two parties grants the daily running of the Rio to Caesars for about two years with a yearly rent of about $45 million. There is an option to extend the lease with the new owner exercising the right to pay Caesars $7 million for extending existing terms for another year.
Better Future Performances
As other casinos in Vegas are scaling down their operations, Caesars has confirmed that they have no intention of reducing operations at the moment. Caesars CEO Tom Reeg said that unlike other operations who were looking at scaling down, the company was looking at opening more properties in Las Vegas.
Reeg further reiterated the company’s need to improve its financial muscle and said he expected Caesars to generate about $50 million in EBITDAR in October, which will be a $40 million rise compared to the figure recorded in July. Caesars is also looking forward to more convention business after it launched a $375 million convention facility in March called the Caesars Forum. The convention had already begun operations before being forced to close down due to the pandemic.
Caesars Forum has already had about 172 events booked for 2021 and beyond with 80% of that from businesses that are new to Las Vegas. Reeg did stress the importance of getting the pandemic under control for the benefits of these bookings to be fully realized.
The convention business sector in Nevada has suffered immense losses due to strict health measures that have hit the travel industry very hard. The same cannot be said about other states that reopened their economies much faster compared to Nevada.
However, Reeg said he was happy to see Gov. Steve Sisolak announce that Nevada was considering allowing the economy to re-open to 50% capacity at the start of 2021.