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Caesars Entertainment 2023 Earnings Spurred By Online Casino Growth

Written By Marc Meltzer on February 22, 2024
Magnifying Glass And Financial Graph Report

This week Caesars Entertainment reported operating results for the fourth quarter and full year ended Dec. 31, 2023. The company announced small revenue increases for the quarter and year while it reduced its overall debt.

Caesars’ fourth quarter 2023 earnings

Caesars’ revenue was $2.83 billion during the fourth quarter compared to $2.82 billion the previous year. The increase in revenue during the quarter helped decrease the net loss from $148 million in 2022 to $72 million.

Caesars Digital (online casino and sports betting platforms) was a highlight for the company during the quarter. Caesars Digital reported an adjusted EBITDA of $29 million compared to a negative $5 million during the same period the previous year.

This was a whopping 680% increase from the fourth quarter of 2022.

Full-year 2023 earnings for Caesars Entertainment

For the year, Caesars reported revenue of $11.5 billion. This was an increase of 6.48% from the $10.8 billion in revenue the company reported in 2022.

Caesars’ net income for the year was $786 million. This is a big turnaround from 2022 when the company reported a net loss of $899 million.

Thanks in part to the big fourth quarter, Caesars Digital revenue was $38 million. This is nearly an 80% increase from 2022 when the company reported -$666 million.

CEO Tom Reeg summed up earnings in a Caesars Entertainment, Inc. press release:

“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% year-over-year increase in Caesars Digital net revenue that generated a 10% Adjusted EBITDA margin in the quarter.

Full-year results benefited from a 78% increase in Caesars Digital net revenues to approximately $1.0 billion, and an over $700 million improvement in this segment’s Adjusted EBITDA.”

Debt reduction in 2023

Debt reduction has been a big part of Caesars’ reorganization plan since completing its merging with Eldorado in 2020.

In the earnings press release, Bret Yunker, Caesars’ chief financial officer said:

“Since the Caesars merger closed in the third quarter of 2020, we have permanently repaid over $3.0 billion in debt and we look forward to another year of strong debt reduction in 2024.”

Caesars net debt to closed 2023 was $11.43 billion. This was down from $12.05 billion at the end of 2022.

The company plans to continue reducing its debt in 2024. During the earnings call with financial analysts, Reeg said: “We continue to want to use our free cash flow to reduce our debt as we get to the inflection point in our capital cycle.”

Caesars Digital growth and announcement of new online casino product

Caesars Digital saw massive growth in 2023, and the company plans to continue the trend this year. Just before the company reported earnings it announced the acquisition of online casino operations from WynnBet in Michigan.

The company expects regulatory approval of this transaction before the end of the year giving Caesars a second platform in the state.

During the earnings call, Reeg said Caesars will debut a new online casino “product and brand” that will “resonate much better with our Caesars Rewards database.”

He didn’t share the name during the call but the company has several well-known brands, such as Caesars Palace Online Casino.

The company could use the national Horseshoe brand or a popular Las Vegas name like Flamingo. Caesars will reveal the name later in the year.

After the earnings call, Caesars Digital and Evolution announced an agreement to expand their partnership throughout North America.

This will allow Caesars to expand live dealer online games. The two companies will create dedicated live dealer studios across multiple US states. The first will be inside Tropicana Casino in Atlantic City, NJ.

Las Vegas results in 2023

Caesars reported $489 million of revenue in Las Vegas for the fourth quarter and $2 billion for the year. The company reported record occupancy and record ADRs (average daily room rate) and is seeing this trend continue into 2024.

The fourth quarter performance in Las Vegas was stunted slightly for two reasons. The company concluded negotiating a new and more expensive union contract.

Now that the union contract is completed, Caesars will have a solid figure to work with when planning financials for 2024.

Additionally, hotel rooms at the new Paris Versailles Tower were unavailable. The rooms inside Paris are completed.

Caesars expected a 5% lift from the Las Vegas Grand Prix for the fourth quarter. Reeg said the company just missed that mark with a 4% lift.

Reeg did not mention any new capital expenditures for Las Vegas this year. However, there are two projects already underway.

The bridge connecting the Paris casino floor to the Versailles Tower is under construction and should be ready for the 2024 WSOP.

The other change visitors will see in Las Vegas is the Vegas Strip frontage of Flamingo. Last year Caesars announced Gordon Ramsay Burger and Pinky’s by Vanderpump will open this summer.

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Marc Meltzer

Marc grew up on the mean streets of the South Bronx. He's the rare combination of Yankees and Jets fan which explains his often contrarian point of view. Marc is a freelance writer and social media consultant. Writing about steak, booze, gambling and Las Vegas is a tough job but somebody has to do it.

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