Caesars to unleash $1bn US sportsbook customer acquisition drive

Caesars Entertainment CEO Tom Reeg has committed to investing more than $1bn in company cash towards sportsbook customer acquisition in the US over the next two-and-a-half years.

On the operator’s Q2 2021 investor call, Reeg revealed details of the ambitious plan, which he suggested could generate an EBITDA return of more than 50% once the strategy completes.

“We realize that we operate in a world that is competitive and that we’ve got to jump in and compete,” Reeg stated.

“So you should expect us to spend over $1bn in the next two and a half  years to build our customer base.

“I can’t give you a more precise number because a lot of the acquisition spend is success-based,” he admitted.

The US casino giant’s CEO suggested Caesars was “leaning the entire organization” into the sports betting vertical as part of the push.

“We are activating the entire enterprise,” Reeg explained.

“We’re connecting to Caesars Rewards more than 60 million people with tiered levels of service and the ability to earn and use points on or offline. We’re activating our player development teams across the organization to sign up new accounts.

“Our frontline labor force will each have their own individual QR code and will be able to sign up customers and be incentivized to help us do that.

“So, this is really a true lean in by this organization that has not happened before,” the Caesars CEO added.

In addition, he suggested Caesars had been distracted by external business issues in prior reporting periods and in the lead up to Q2, something he was keen to rectify after it hampered the firm’s sports betting progress.

“The numbers that you see and that we’ve generated before have been in this kind of lame duck universe where we had bought Caesars, we had the partnership that needed to be restructured, and then we had the time between announcing the William Hill deal and closing it,” he explained.

“In that environment the business that we were doing was kind of just incidental, with not enough real focus,” Reeg added.

When pressed by analysts, Reeg admitted the firm’s investment could go as high as $2bn due in part to what he called a ‘Wild West’ of emerging US states and operators throwing all their resources into acquiring customers.

Discussing Caesars own potential, Reeg explained: “If we lean into this appropriately, we’ve got 54,000 sales people in our company that work with customers every day that can open new accounts.

“We have dedicated player development executives that deal with building relationships and expanding those relationships every day and have done for decades.

“We have physical experiences that we can offer and tie into that business that I think positions us well ultimately for success,” Reeg added.

The new-look Caesars Sportsbook was officially launched earlier this week, triggering a multi-million-dollar marketing campaign to unveil its upgraded app and consolidated brand, which brings together Caesars existing business with William Hill US.

The app, which integrates with the Caesars Rewards loyalty program, has also been upgraded with more ways to earn Caesars Rewards points and a new mobile interface designed to be easier to use.

Addressing the launch, Reeg highlighted the completion of the Hills acquisition in April as triggering a period of review for the firm and its sportsbook offering.

“We closed the William Hill transaction a little over 100 days ago, and we have spent much of that time since taking stock,” he explained.

“Because of the rules in the UK, we really could not do much in terms of preparing for when we would close the transaction, and we wanted to be in a position to launch ahead of the new football season,” Reeg added.