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Caesars Entertainment reported second-quarter earnings of $2.8 billion. This was slightly lower than last year when the company posted $2.9 billion in revenue.
While land-based casinos are the core business, Caesars Digital has been a company highlight for the first half of the year. During the second quarter, Caesars online casino and sports betting division reported an EBITDA of $40 million compared to just $11 million during the same period a year ago.
That’s a huge 28% increase compared to the second quarter last year.
Caesars Digital also turned a quarterly profit. Last year, the division had a $22 million net loss during the second quarter. This year Caesars Digital’s net revenue was $4 million for the quarter.
Caesars CEO Tom Reeg boasted about the division in a Caesars Entertainment news release, saying:
“Our Caesars Digital segment posted a new second-quarter Adjusted EBITDA record, driven by strong revenue growth and solid flow through.”
The company also revealed the name of its new online casino app. Caesars will launch the new Horseshoe online casino app in Michigan in September.
We speculated the company could use this brand to launch the new app when Caesars reported Q4 and full-year 2023 earnings in May.
Key takeaways
- Caesars Digital sets quarterly record
- Horseshoe Casino app coming to the Michigan online casino market in September
- WSOP does better business in Las Vegas than online
- Caesars Palace Online Casino continues to grow
Horseshoe online casino app coming to Michigan in the fall
Caesars plans to launch the Horseshoe Casino app in Michigan this September. The company plans to roll out the app in other states every month.
Once it launches in MI, Caesars plans to distribute the Horseshoe Casino app monthly to states where online casinos are legal. Once the US is covered, the company expects to offer the Horseshoe Casino app in Ontario sometime during the first quarter of 2025.
While Caesars was light on details about the app for players, the company issued a warning of sorts about how much business it expects. Eric Hession, president of Caesars Sports and online gaming said:
“I also would tamper the expectations just Horseshoe is a great brand, and it really — we feel like it’s going to resonate with a lot of customers.
“But Caesars is even a better brand. And quite frankly, that’s going to be the flagship app that we have, and it’s got a year’s lead over the Horseshoe. So I would expect the Horseshoe to perform very strongly, but I don’t think it will command the market share that Caesars as well.”
WSOP performance
The World Series of Poker is one of the most well-known names in gambling. However, it doesn’t exactly translate into online casino revenue for Caesars.
The topline quote from Reeg during Caesars’ earnings call sounds great: “This was our best World Series ever from a financial perspective.”
The majority of WSOP revenue comes offline. During the Caesars Entertainment Q2 2024 earnings call, Reeg said WSOP is a catalyst for ancillary business in Las Vegas.
The company sells Las Vegas hotel rooms, casino games do better business, and since people are in the casinos food and beverage sales increase. Hession added:
“The online poker does okay, but doesn’t make a huge amount of money.”
Altogether, WSOP generates about $20 million and $25 million in EBITDA for Caesars.
Online casino poised to continue strong performance for caesars
Caesars Digital (NASDAQ: CZR) continues to move in a positive direction for the company. Executives for the company expect this to continue.
In his opening comments during the recent earnings call, Reeg said that “momentum in digital is quite strong for us and all of the targets that we’ve laid out in the past still seem well within our grasp.”
Caesars Digital includes its Caesars Palace Online Casino and a sports betting platform. It appears as though the online casino business could be more profitable for the company than sports betting.
Sports betting has the overall advantage of being legal in more states at this time. Online casinos have the advantage of lower and more stable tax rates. The company also caps customer acquisition costs for its online casino segment, which could be a long-term cost savings.
The company doesn’t offer specific revenue for different online casino portals. However, Hession shared that “the Caesars Palace online app continues to grow as a percentage of our iCasino business. So it’s accelerating at a faster than 50% pace.”
He also said the company plans to add new online casino games including some exclusively designed with Caesars themes.
