During this week’s earnings call reporting Q2 earnings, President of Caesars Sports and Online Eric Hession confirmed that the anticipated new online brand for the company will be Horseshoe Casino.
Horseshoe Casino will debut in Michigan, expand state-by-state
The brand will debut in Michigan in September. Earlier this year Caesars announced it was acquiring Wynn’s licenses in Michigan and planned to roll out another online casino brand but did not disclose what the brand would be.
On Tuesday Hession confirmed it would be Horseshoe but also made it clear that the company does not see this as a huge moneymaker or something that would experience the success of its Caesars Online Casino brand, which launched last August as a casino-forward app.
We’re launching it slightly differently than we did with Caesars Palace, where we’re going to do effectively one state at a time. So pending regulatory approvals, we’re going to launch in Michigan in September time frame. And then we’ll roll out into the other states throughout the year, ending in Ontario in Q1,” he explained.
I also would temper the expectations. Horseshoe is a great brand, and we feel like it’s going to resonate with a lot of customers,” he added. “But Caesars is even a better brand. And quite frankly, that’s going to be the flagship app that we have, and it’s got a year’s lead over the Horseshoe. So I would expect the Horseshoe to perform very strongly, but I don’t think it will command the market share that Caesars will.”
Caesars online casino growing faster than sportsbook biz
Online casino has been the booming side of the business for Caesars and Hession reiterated that side of the business would continue to “significantly” outpace sports betting in the near future.
That being said, Hession did note that there is going to be improvements on the sports betting side as well.
“From the sports betting side, we do feel like there’s still going to be solid growth there, but it’s probably going to be more like you’re seeing now where it’s in the 20% range. And so over time, the relative revenues from those two will converge.”
Hession also noted that several expensive team sponsorship deals inked in 2021 when the revamped Caesars Sportsbook app launched will expire in 2026 and majorly improve the digital arm’s balance sheet.
It was a rough Q2 for Caesars overall, with net losses of $122 million, which was largely attributed to the release of a $940 million valuation allowance against deferred tax assets.
The digital side had a solid quarter that produced $40 million in adjusted EBITDA compared to $11 million during the same period in 2023.
Net revenues were up to $276 million compared to $216 million last year. The division even produced produced $4 million in net income, reducing the year-to-date losses for digital to $30 million so far for 2024.
WSOP remains more of a land-based than online product
With the World Series of Poker wrapping up another record year for the Las Vegas-based live event, Hession did discuss how much of the digital revenue came from the WSOP.com online poker brand and, unsurprisingly, admitted it amounted to very little. The brand itself remains profitable for the company given the revenue from media rights, live events and licensing deals.
“The online poker does okay, but doesn’t make a huge amount of money, and then the royalty streams and the land-based casinos where the economics are, it makes between $20 million and $25 million for the year as a whole.”
Caesars absolutely not interested in buying Penn
With rumors swirling that Penn Entertainment might be up for sale, it was no surprise that during the Q&A the topic came up, but Caesars Entertainment CEO Tom Reeg was quick to shut things down.
“I’d say we’re just reading the same headlines you are. We’re not even tangentially involved in whatever’s happening at Penn,” he said. He went on to say when it comes to M&A, they are certainly still open to selling off certain aspects of the business. Rumors have been circling for some time that the WSOP might be one of those brands, but it did not come up specifically as an option..
