Caesars Entertainment has published its financial results for the fourth quarter and the full year 2023, declaring growth in net revenue, net income and adjusted EBITDA.
CEO Tom Reeg attributed the growth seen by the operator during Q4 and across the full year to Caesars Digital operations, which rose by almost 30 per cent year-over-year during the quarter and close to 80 per cent for the entire year.
In addition, the operator has already begun 2024 announcing further expansions to its digital operations, after agreeing to acquire the operations of WynnBET’s Michigan igaming business, securing market access with the Sault Ste. Marie Tribe of Chippewa Indians.
Caesars’ 2023 revenue growth
Publishing its financial results, Caesars declared Q4 net revenues of $2.83bn, up from the $2.82bn recorded during Q4 the previous year, but down on the $3bn reported in Q3. For the full year, net revenue stood at $11.5bn, an improvement on 2022’s $10.8bn.
Q4 net income came in at a $72m loss, an increase on the $148m loss recorded during the same period the previous year. For 2023, Caesars achieved a net income of $786m, a significant uptick on the $899m net loss registered in 2022.
Same-store adjusted EBITDA for the quarter was $930m, down from the $949m reported during Q4 2022. For the full year, same-store adjusted EBITDA was $3.9bn, up from the $3.2bn declared last year.
Reflecting on the results, Reeg attributed the growth seen during both measuring periods to improvements seen within its Caesars Digital segment.
The CEO commented, “Our fourth quarter operating results demonstrated consolidated net revenue growth, reduced net loss and stable consolidated adjusted EBITDA year over year. Results were driven by a 28 per cent year-over-year increase in Caesars Digital net revenue that generated a 10 per cent Adjusted EBITDA margin in the quarter.
“Full year results benefited from a 78 per cent increase in Caesars Digital net revenues to approximately $1bn, and an over $700m improvement in this segment’s adjusted EBITDA.”
Improvements driven by Caesars Digital
Per segment, Las Vegas Q4 revenue fell to $1.09bn in comparison to $1.15bn in Q4 2022. Regional revenue stood at $1.36bn (Q4 2022: $1.36bn), Caesars Digital revenue was $304m (Q4 2022: $237m), Managed and Branded revenue was $68m (Q4 2022: $72m) and Corporate and Other revenue was a $1m loss (Q4 2022: $2m).
For 2023, Las Vegas revenue was $4.47bn (2022: $4.29bn), Regional revenue was $5.78bn (2022: $5.7bn), Caesars Digital revenue was $973m (2022: $548m) and Managed and Branded revenue was $307m (2022: $282m).
While Caesars Digital was a driver of revenue growth during Q4 and across the full year, the segment, alongside Corporate and Other, did record a net loss during both reporting periods.
However, these figures were still improvements in comparison to the net loss declared in both segments during Q4 and across the full year in 2022.
Q4 net income per segment was as follows: Las Vegas – $250m (Q4 2022: $295m), Regional – $2m (Q4 2022: $17m loss), Caesars Digital – $8m loss (Q4 2022: $35m loss), Managed and Branded – $18m (Q4 2022: $20m), Corporate and Other – $334m loss (Q4 2022: $411m loss).
2023 net income stood as follows: Las Vegas – $1.04bn (2022: $1.02bn), Regional – $377m (2022: $463m, Caesars Digital – $91m loss (2022: $790m loss), Managed and Branded $101m (2022: $301m loss), Corporate and Other – $643m loss (2022: $1.29bn loss).
Although Caesars Digital continues to see net loss, the segment did undergo adjusted EBITDA improvements in Q4 and across the full year.
Q4 adjusted EBITDA per segment: Las Vegas – $489m (Q4 2022: $537m), Regional – $431m (Q4 2022: $443m), Caesars Digital – $29m (Q4 2022: $5m loss), Managed and Branded – $18m (Q4 2022: $20m), Corporate and Other – $37m loss (Q4 2022: $38m loss).
2023 adjusted EBITDA per segment: Las Vegas – $2.02bn (2022: $1.96bn), Regional – $1.96bn (2022: $1.99bn), Caesars Digital – $38m (2022: $666m loss), Managed and Branded – $76m (2022: $84m), Corporate and Other – $154m loss (2022: $124m loss).
As of December 31, 2023, Caesars had $12.4bn in aggregate principal amount of debt outstanding, and total cash and cash equivalents were $1bn, excluding restricted cash of $138m.
CFO Bret Yunker noted: “On February 6, we successfully closed on our $4.4bn refinancing, allowing us to repay all outstanding 2025 debt and extending our nearest maturity to July of 2027.
“Since the Caesars merger closed in the third quarter of 2020, we have permanently repaid over $3bn in debt and we look forward to another year of strong debt reduction in 2024. We ended the quarter with total net leverage as calculated under our bank credit facility of 3.9x as of December 31, 2023.”
WynnBET Michigan igaming acquisition
As previously announced, Caesars has already kicked off 2024 with a new addition to its digital operations, expanding further in the Wolverine State.
The operator has agreed to acquire WynnBET’s Michigan igaming business and has secured a long-term extension of market access rights with the Sault Ste. Marie Tribe of Chippewa Indians, subject to regulatory approvals.
The Sault Tribe currently owns and operates Kewadin Casinos, consisting of five land-based casinos located throughout the upper peninsula of Michigan.
Through the deal, Caesars will gain access to the Sault Tribe’s igaming skins, allowing the company to operate more digital brands in Michigan. Pending regulatory approval, existing WynnBET customers in the state will be transitioned to Caesars’ igaming platform.
Wynn and Caesars will receive non-cash consideration, including extinguishment, reductions, and assignment of certain contractual obligations related to both parties’ businesses.
Austin Lowes, Chair of Sault Ste. Marie Tribe of Chippewa Indians, stated: “It was paramount that our next partner in iGaming possessed both expertise in the US igaming market and a history of strong partnerships in Indian country. We believe we found that with Caesars and look forward to being part of their new icasino offering.”
In Michigan, Caesars will now operate WynnBET’s igaming operations with the Sault Tribe in addition to its Caesars Sportsbook and Caesars Palace Online Casino, with the intention of transitioning the WynnBET icasino operations to one of its portfolio brands later this year.
Matt Sunderland, SVP & Chief iGaming Officer for Caesars Entertainment, added: “As we continue to grow our igaming franchise, the assumption of WynnBET’s igaming operations in Michigan allows us to tap into a significant market and customer base, providing a crucial step forward in growing our digital products and offering players more ways to play.
“We are honoured to work with the Sault Ste. Marie Tribe of Chippewa Indians and look forward to growing with them in Michigan.”
