Digital has been the cause of much optimism for Caesars during a Q2 financial breakdown and earnings call, as the company looks to accelerate momentum following a first quarter of positive adjusted EBITDA.
Revenue and earnings of $216m (2022: $152m) and $11m (2022: -$69m) through the three months helped push year-to-date figures to $454m (2022: $99m) and $7m (2022: -$623m), respectively.
“During the second quarter of 2023, we delivered another significant improvement in the performance of our digital segment versus last year. Results this quarter represent our first full quarter of EBITDA profitability since rebranding to Caesars Sportsbook in Q3 2021,” stated Eric Hession, President of Caesars Sports and Online Gaming.
“During the quarter, sports betting hold improved 180 basis points versus last year, and icasino volume increased 27 per cent year-over-year.”
This, the operator noted, is due to “the effectiveness of our targeted promotional investment”, as well as a lower level of marketing within both the existing customer base as well as those users located in the new states.
“…it was difficult to have that discussion with the customers when they had to go through the sports betting app each time to get to the casino”
Eric Hession, President of Caesars Sports and Online Gaming
Furthermore, a quartet of tech improvements are expected to drive the segment’s performance forward further still, the first of which has seen the company introduce a standalone igaming product under the Caesars Palace brand.
This “is now live in multiple states” and is pending regulatory approval further afield, as is expected to drive a significantly improved product and enhanced marketing capabilities, in addition to the benefits of the group’s rewards program.
In addition to noting that the company is “quite optimistic” regarding this move, Hession added: “We’re finally going to have a product out in the market that we can use to work with our existing database, to have those customers that we know and that are loyal to the Caesars rewards program move over to the online casino side.
“It was difficult to have that discussion with the customers when they had to go through the sports betting app each time to get to the casino. And so they won’t have that.”
Caesars has also transitioned its self titled app in Nevada to the Liberty tech platform acquired as part of the William Hill acquisition, has started rolling out a native iOS Sportsbook app that anticipates reaching 100 per cent adoption in August and is on track to introduce an in house player account management system starting state by state later this year.
This latter point, Hession noted, will ultimately lead to a shared wallet that we anticipate rolling out in 2024.
On a group-wide basis, revenue increased 2.1 per cent through the quarter, with net income at $920m compared to 2022’s loss of $123m and adjusted EBITDA closing at $1bn, up three per cent year-on-year from $978m.
“While we face new competition in a few markets during the quarter, customer demand trends remain stable”
Anthony Carano, President and Chief Operating Officer,
Anthony Carano, President and Chief Operating Officer, touching strong land-based operating trends, against touch YoY comparatives.
The Las Vegas segment saw revenue and AEBITDA drop 1.2 per cent and 6.4 per cent to $1.12bn (2022: $1.1bn) and $512m (2022: $547m), however, Carano stated that this represented the delivery of a “second best Q2 adjusted EBITDA”.
On a regional basis, a revenue increase of less than one percentage point to $1.46bn (2022: $1.45bn) was set against AEBITDA of $508m, which is also down one per cent point from $513m.
“We were excited to open two new temporary facilities this quarter in Danville, Virginia and Columbus, Nebraska,” commented Carano.
“Both properties are open to strong customer demand. While we face new competition in a few markets during the quarter, customer demand trends remain stable and similar to prior quarters. Our capital projects continue to deliver solid returns.”
For the YTD, group-wide revenue climbed 11.8 per cent to $5.7bn (2022: $5.11bn), net income reached $784m (2022: -$803m) and AEBITDA increased 54.2 per cent to $1.96bn (2022: $1.27bn).
