Digital growth helps soften otherwise rough Q1 for Caesars
Online segment sees 18.5% YOY surge in revenue amid gaming giant’s wider losses as CEO insists he is “optimistic” over improved results throughout 2024
The first quarter of 2024 was not a memorable one for Caesars Entertainment as the gaming giant saw revenue fall across most of its operating segments with the notable exception of its growing digital wing.
Buoyed by a still burgeoning US online gaming market, Caesars Digital generated $282m in net revenue, an 18.5% year-on-year (YOY) increase from $238m during the same period last year.
The arm also returned a positive adjusted EBITDA contribution of $5m compared to Q1 2023’s loss of $4m.
However, net losses for the division grew by 6.3% from $32m to $34m.
Overall in Q1, Caesars reported a 1.2% revenue decline from the $2.83bn it generated in Q1 of 2023, with total net revenue amounting to $2.74bn for the three months ending March 31, 2024.
Caesars CEO Tom Reeg attributed the dip to a confluence of events including lower-than-expected hold and poor weather that contributed to a “repeated butt-kicking broadly based throughout the quarter.”
Digital growth nonetheless represented a bright spot for the gaming giant despite losses incurred during the launch of online sports betting in North Carolina.
“We feel very, very, very good about what’s going on in digital,” Reeg said. “It really matches the progress against markers that we laid out when there was no one in the space laying out any similar markers.”
Land-based operations in Las Vegas saw revenue slip 4.5% to just over $1bn while regional revenue dipped 1.7% to $1.4bn.
While online remains a focus point, brick-and-mortar continues to represent the heart of Caesars’ business. Total adjusted EBITDA came to $853m for the quarter, a 9.9% YOY decrease from $958m during Q1 of 2023.
Las Vegas contributed $440m of this total, down from $533m in Q1 2023, while the regional operators returned earnings of $433m, down from $448m.
In addition to online sports betting expansion, Caesars has poured a surplus of bandwidth into its icasino vertical this year, headlined by the acquisition of WynnBET’s igaming operations in Michigan in February and bolstered by the rollout of an upgraded Caesars Palace Online app on April 30.
The revamped app boasts a multi-lobby navigation intended to mimic a casino gaming floor, with popular game concepts such as slots or table games grouped together within the digital lobbies.
Other features include a customized ‘For You’ tab that allows users to pick up where they left off in the app, as well as a new pipeline of exclusive games with increased loading speeds and crisper functionality.
“Caesars Palace Online Casino’s refresh is centered around giving our online casino players an experience that stands out from the ordinary,” said Caesars Digital VP of product, igaming Michael Mastrangelo. “Our new mobile app redefines the online casino player experience with seamless functionality and product innovations that are brand new to the industry.”