The second quarter for Caesars Digital was a milestone one, as the group posted its first EBITDA positive results since rebranding to Caesars Sportsbook. According to the latest earnings call from the company, that is just the beginning too. While Q3 was deemed a coinflip to see which side of break-even the company will land on, Caesars expects positive results on the digital side for Q4 as well.
The digital arm of the company produced an adjusted EBITDA of $11 million, which is a far car from the $69 million in losses in 2022.
“Results this quarter represent our first full quarter of EBITDA profitability since rebranding to Caesars Sportsbook in Q3 2021. During the quarter sports betting hold improved 180 basis points versus last year, and iCasino volume increased 27% year over year. Our performance this quarter continues to demonstrate the effectiveness of our targeted promotional investment and overall lower level of marketing within our existing customer base as well as customers located in the new states,” said Caesars Sports and Online Gaming Co-President Eric Hession.
Hession outlined four core accomplishments for the digital team over the past quarter that helped contribute to the positive results.
- The introduction of the casino-forward Caesars Palace app
- Transitioning the Nevada online sportsbook offering to the flagship Liberty product
- The rollout of the new, higher rated net-native iOS sportsbook app
- The introduction of an in-house PAM and shared rollout that should be ready by early 2024
Caesars CEO Tom Reeg reiterated his support and optimism for the digital side of the company, noting all of the metric goals he put on the digital side of the business are on track to hit.
I laid out pretty specific targets in terms of where we can be in digital looking out to ’25 on our last call, then I went to some conferences where a lot of you told me there’s no way we’ll get there. I would tell you every number that I laid out 90 days ago or so, I’m 100% confident that we’re going to hit. Every metric that I look at going forward is at or above where we were 90 days ago when I laid out those targets. So I tell you, I’m reiterating those targets as we look forward,” Reeg said on the call.
“We are fully aware that we have significant competition in the iCasino space. We don’t expect that we’re just going to come in and run everybody over. But we feel like we’ve got the product to start to build market share and wrapping that into Caesars Rewards has been and will continue to be powerful for that business,” he added.
As for just how big that marketing push will be? Well, don’t expect the same massive rollout like the company did in New York for sports betting, which included $3,000 deposit match offers.
“You should expect us to be visible in terms of promoting the app, but nothing anywhere close to what you saw when we launched the sports app,” Reeg said. “I would describe us right now and iCasino for the last couple of years as invisible from a marketing standpoint. It will become visible in the next month or so.”
Reeg also spoke a bit about sports betting and expected handle. While FanDuel and some operators are regularly posting double-digit hold, he said the expectation at Caesars is more in the range of 7.5-8%. Hession did say the customer base is getting further away from focusing on straight wagers, which should tick things upward but in Nevada in particular, straight wagers continue to keep hold lower than some competitors.