Caesars Entertainment has reiterated its first quarter digital stance through the group’s Q2 earnings call, with the business said to have “improved significantly” during the second three month period of the year.
Following losses of $53m, $576m, and $554m across revenue, net loss, and adjusted EBITDA through Q1 which was aligned to new market launches, the segment tracked $152m, -$116m, and -$69m, respectively, in the group’s latest report.
“I expect we will not have a quarter of $100m quarterly EBITDA loss in digital again,” noted Thomas Reeg, CEO & Director, as Eric Hession, EVP, delved into more detail.
“As Tom previewed on our last earnings call, our strong gains in unaided brand awareness have allowed us to scale back our brand-related marketing spend,” he explained.
“That reduction in combination with the reduced promotional investment environment translated into steadily improving results throughout the quarter.
“As we look to the back half of the year, we expect a number of significant product enhancements for our customers in key areas such as cash out speed, customer service and parlay and alternative line offerings.”
Caesars also anticipates converting all branded apps and sportsbooks to the Liberty tech stack by the end of 2022, which it is expected will drive the customer experience further still.
“We continue to believe that scale is important for our digital sports betting and icasino and poker offerings and pending regulatory approvals plan to expand into states and jurisdictions where allowed,” he added.
“As a result, we will continue to remain focused on growth through new state launches, investing from a tech perspective on product enhancements and remaining acutely focused on our expenses.”
Furthermore, Caesars issued updates on current projects that are being undertaken, while also noting a potential Las Vegas sale is a “discretionary trade for us,” with Reeg noting “and if we have a trade that makes sense for us, we’ll do it. If we don’t, we’re fine with.”
A land-based facility Horseshoe Lake Charles, Louisiana, is expected to open in December, additional entitled in New Orleans are said to be “progressing well,” and ground breaking is expected to occur on Caesars Danville in Virginia, Harrahs’ Columbus in Nebraska and a casino expansion for Harrah’s Hoosier Park during this quarter.
“These are all exciting projects that will generate a meaningful return on the investment for our company,” stated Anthony Carano, President and COO at Caesars.
“As we look to the remainder of ’22, we remain optimistic about our business as consumer trends remain healthy, especially versus 2019.”
Through the second quarter Caesars has reported a 10.6 per cent revenue increase to $2.82bn (2021: $2.5bn), as a continued Las Vegas recovery complemented a “dramatically” improved digital segment.
This saw Las Vegas surge 33.6 per cent to close the quarter with revenue of $1.14bn (2021: $855bn), with regional tracking a slight 4.1 per cent drop to $1.45bn.
Net loss declined to $123m from an income of $71m one year earlier, as the group’s managed and branded and corporate and other segments dropped to losses of $132m (2021: $13m) and $333m (2021: $329m) to add to the digital performance.
Las Vegas saw net income increase to $313m (2021: $184m), while regional fell to $145m (2021: $251m).
Adjusted EBITDA declined 3.3m per cent overall to $978m (2021: $1bn), as an increase of 29.3 per cent to $547m (2021: $423m) in Las Vegas failed to offset losses felt across all four other reporting segments.
Regional dropped 15.1 per cent to $513m (2021: 602m), while managed and branded and corporate and other closed Q2 at $22m (2021: $26m) and a loss of $35m (2021: -$42m), respectively.
“Our second quarter results reflect a consolidated EBITDA record for our brick and mortar properties led by an all-time quarterly EBITDA record in Las Vegas and continued strength in our regional markets when compared to 2019,” Reeg said.
“Operating results in our digital segment improved dramatically versus the first quarter and we are optimistic regarding trends in this segment for the balance of the year.”