Online gaming and sports betting were the bright spots for Caesars Entertainment's 2023 fourth-quarter earnings report.
Caesars Entertainment reported a net loss of $72 million in the fourth quarter. Although this was better than the $148 million loss it reported for the same period last year, it still wasn’t the improvement analysts were looking for from the casino giant. And it was even more of a disappointment, given Caesars’ stellar 2023 Q3 results.
Granted, the fourth quarter is generally the slow quarter for the casino sector. Penn Entertainment, for instance, turned in particularly lackluster Q4 results. Admittedly, Penn was tackling some additional challenges as it transitioned to ESPN Bet, its new sportsbook partner.
Meanwhile, Caesars’ revenues were stagnant in Q4, coming in at $2.83 billion versus $2.82 billion from the same quarter last year. Analysts had projected revenues of $2.85 billion. Some of the sluggish results were due to construction projects, which were planned to coincide with the slower fourth quarter.
For instance, roughly 65,000 rooms associated with the company’s transformation of the Horseshoe in Las Vegas into the Versailles Tower of Paris were offline during the quarter. The company also had construction-related disruptions in Indiana and New Orleans during the quarter.
Caesars Digital Turns to Profitability
The one silver lining of the report was the improvement in Caesars Digital segment. Net revenues for its online gaming and sports betting division came in at $304 million, up from $237 million in the fourth quarter of 2022.
More importantly, Caesars Digital reported a positive $29 million Adjusted EBITDA for the quarter versus a negative Adjusted EBITDA of $5 million from the same period last year.
During the company’s conference call, Eric Hession, President of Caesars Sports and Online Gaming, said, “On our Q4 call last year, I talked about how the benefits of scaling net revenues in our digital segment would drive improved profitability given the high flow-through nature of this business. This transpired as strong revenue growth in Q4 and for the full year of 2023 led to several notable records within our digital business.”
Hession also noted, “iGaming growth accelerated throughout the quarter and delivered over 50% growth in volume led by Caesars Palace Online, which contributed to our first quarter of $100 million GGR for the segment.”
iGaming Growing Organically – and Through Acquisition
Meanwhile, iGaming should continue to thrive into 2024. Hession referred to it as a “critical part of our growth strategy.” It was during the conference call that Caesars announced its agreement with the Sault Ste. Marie
Tribe of Chippewa Indians and Wynn Resorts to acquire its second iGaming brand in Michigan.
In August, Wynn announced it would terminate WynnBet in eight states. At that time, WynnBet’s operations in
Michigan was “under review.” That review has culminated in a likely win-win for both casino companies.
Caesars was looking to grow market share in Michigan just as Wynn was looking to ramp down its online operations.
