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When it comes to Caesars Entertainment, it increasingly looks like online casino products are a means to an end instead of an objective in and of themselves. The recent divestment from the World Series of Poker and announced rebranding of one of Caesars Digital’s products in Michigan strengthen that narrative.
Some data suggest Caesars (NASDAQ: CZR) has the right perspective on its iGaming segment. If it steers resources appropriately, that perspective could produce additional benefits.
Caesars divests from WSOP, announces new product
Two recent moves by Caesars are all about branding for both online and physical gaming products. Caesars has sold the intellectual property rights for the World Series of Poker (WSOP) to NSUS, a company it has been collaborating with on the WSOP for years.
Caesars will license the branding back from NSUS and continue to host WSOP in-person events at its brick-and-mortar casinos. Furthermore, WSOP.com will continue to operate in Michigan, Nevada, New Jersey and Pennsylvania without interruption.
Caesars can take some of the $250 million it got upfront for the rights to WSOP and use it to power another change. In June, Caesars announced that it agreed to buy the Michigan operations of Wynn Interactive.
With that purchase, Caesars got another opportunity to offer Michigan online casino play. It will use that to debut a new brand, Horseshoe online casino, in the third quarter of 2024.
That will complement the existing Caesars Palace online casino in Michigan. It reinforces Caesars’ approach to iGaming, too.
Caesars builds online casino blueprint
For Caesars, the introduction of a Horseshoe online casino follows in the footsteps of earlier moves.
Caesars launched a Harrah’s-branded platform in 2013, becoming one of the first apps in that state. To date, New Jersey is the only place where Harrah’s online casino is available.
Tropicana online casino went live in New Jersey in March 2023 and expanded into Pennsylvania a few weeks later. That was soon followed by another debut.
Caesars Palace online casino became an option for players in Michigan, New Jersey, Pennsylvania, and West Virginia in August 2023. In all of those states, that app is Caesars’ best-performing in terms of market share.
There are two obvious motivations behind these branding decisions. Caesars already owns these brands, so there’s no need to license them or share any revenue with another party.
Also, the online casino products become an automatic and natural marketing tool for the physical casinos sharing the branding. Those motivations also serve as a justification for the cost of the online casino apps.
In terms of market share of win, Caesars’ online casino products haven’t blown away the competition in any of these markets. However, that’s probably irrelevant to a large degree for the larger company.
Driving brand loyalty through online casino play
It’s a classic example of the chicken or the egg for Caesars. Rather than use significant resources to market Caesars Palace, Harrah’s, Horseshoe and Tropicana in an effort to become the win market share leader, those online casino apps are the marketing tools.
Using them, Caesars likely hopes to point consumers toward what it can offer that DraftKings Casino and FanDuel Casino can’t. That is the ability to earn Caesars Rewards credits and utilize them for promotional play or other benefits at Caesars’ brick-and-mortar properties.
While there are no Horseshoe-branded casinos in Michigan currently, the Horseshoe brand is established in Nevada and seven other states. Should any of those seven states legalize real-money online casinos in the future, Horseshoe would be a natural fit.
By the same token, if gaming licensees in Nevada decide to start offering online casino play, Horseshoe is ready to go.
Allowing NSUS to take the reins of WSOP allows NSUS to focus on trying to aggressively grow that brand and puts Caesars in position to focus on using its iGaming products as a growth strategy.
If Caesars seriously invests in those resources to put out a differentiated and superior iGaming product, it will achieve significant reach. Should it treat all of its online casino brands as mere commercials for the physical casinos, though, it risks deterring the same audience.
The success of Caesars’ strategy will depend on consumer satisfaction with the various apps and the rate at which the iGaming products drive interest in brick-and-mortar offerings. Building out the online casino roster and removing distractions seem to be good moves in that regard.
