Caesars Entertainment announced a $9 million loss in the third quarter of 2024 on Tuesday, but the gaming and resort operator came away pleasantly surprised by its online sports betting and iGaming progress.
Caesars Digitial enjoyed a 40.9% year-over-year increase in revenue, reaching $303 million in Q3.
Adjusted EBITDA climbed from $2 million in Q3 2023 to $52 million, an all-time quarterly record.
After deducting expenses and allowances, Caesars Digital enjoyed $11 million in net income, up from $4 million in Q2. This is a massive boost for the company after it posted a $29 million net income loss in Q3 2023.
“I think the future is very bright for our digital business,” Caesars CEO Tom Reeg said. “I think that business is going to end up generating a hell of a lot more than the $500 million target everyone has been wringing their hands about for the last three years. We feel very good about that.”
iGaming revenue surges
Eric Hession, Caesars president of sports and online iGaming, said online casino net revenues grew 83% year-over-year, thanks to a 40-point basis increase in hold.
Volume rose 55% from Q3 2023 despite the new Horseshoe iGaming brand rolling out at the tail end of the quarter.
“With this performance, we have now generated trailing 12 months EBITDA of $126 million,” Hession said. “Our net revenue flow through to EBITDA in the quarter was slightly above our planned 50% range.”
Caesars’ second online casino brand is now available in Michigan, West Virginia, and Pennsylvania. Expansion into New Jersey and Ontario, currently Canada’s lone regulated online gaming province, is scheduled by the end of the year.
“Tremendously pleased with the way digital has been coming together,” Reeg said. “We had been outpacing our peers in growth by about two times coming into the quarter. I’d guess three times in the third quarter.”
Online sports betting shines
Sports betting net revenue also experienced a solid 36% year-over-year increase, driven by an 8.6% hold that was up two points from Q3 2023.
Hession attributed app enhancements in 32 North American jurisdictions and a successful marketing campaign that started in April to increase customer retention and revenue growth.
“Given our roadmap and our customers’ receptivity to the enhanced parlay options, we now believe that achieving a structural hold above a 10% threshold is achievable in the next few years,” Hession said.
September was an especially good month for sports betting operators, but Reeg said the start to October was one of the worst the company has seen as bettors took back some of the previous month’s profits. Still, Caesars says it has been reinvesting less than its online sports betting competitors.
Total revenue
Caesars reported $2.87 billion in total Q3 revenue, below expectations and down from the $3 billion brought in during the third quarter of 2023.
The Las Vegas segment saw a 5.2% year-over-year drop to $1.06 billion in revenue during Q3 2024. Reeg said the $10 million drop in EBITDA primarily came from lower table holds than the previous year. The slot handle and win were flat, but non-gaming revenue in Las Vegas set a quarterly record as occupancy and food and beverage sales soared.
The regional segment was down 13% year-over-year.
Sale complete
Caesars also announced that it closed the $500 million sale of the World Series of Poker rights to NSUS Group. The deal includes half of the payment in cash while the other $250 million is a promissory note to be paid in five years.
Caesars retains the ability to host the poker event at its Las Vegas casinos and receives preferential rights for other WSOP events at its properties. Caesars also keeps the branding at poker rooms.
The gaming company will obtain a license from NSUS to operate WSOP Online real-money poker sites in Nevada, New Jersey, Michigan, and Pennsylvania “for the foreseeable future.” However, Caesars can’t operate online peer-to-peer real-money games for a “specified period of time and subject to certain exceptions.”
