Gambling Casinos See Revenue Growth, But Stock Prices Fall

Caesars Entertainment saw year-over-year growth, but still fell short of making a profit in the second quarter of 2011. The company reported a loss of $155.5 million for the quarter, compared to a loss of $274 over the same period in 2012.

Revenues for Caesars were up about 0.4%, up to $2.3 billion thanks to higher hotel revenues. That, along with higher spending among repeat visitors was enough to offset the temporary closures of five properties in the United States due to flooding.

Caesars operates over 50 different casino properties around the world, including casinos in 12 different states. The hotels are run primarily under three brand names: Caesars, Harrah’s and Horseshoe. Until recently, the company was known as Harrah’s Entertainment.

"Our second-quarter results clearly indicate that the organizational and strategic changes we've made to meet the challenges of the recession are improving our performance and paving the way for accelerated growth when the economy improves," said Gary Loveman, Caesars’ CEO and chairman.

The news comes after similar growth was reported by MGM Resorts. Overall, MGM’s revenues were up 17% in the second quarter, driven mostly by growth in Macau. Total revenues were up to $1.8 billion, and domestic US revenues was also up 4% (like Caesars, this was primarily due to higher hotel revenues).

With the rest of the market getting hammered around the world over the past week, it’s no surprise to see casino stocks down as well. However, gambling stocks were down even further than the markets as a whole, as fears of a new recession have left investors uncertain about future gaming revenues. At the close of markets on Monday, MGM was down 24%, Las Vegas Sands saw its stock down 22%, and Wynn Resorts had lost 18% of its value.