“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,” CEO Tom Reeg said in a statement announcing his company’s second-quarter earnings.
Attention shifts now to Caesars’ moves in Q3.
US sportsbooks typically spend the most marketing dollars in late summer leading up to the September football season kickoff. It remains to be seen if Caesars will continue to match or top its major sports betting rivals’ massive promo and marketing spend or if will – after years of massive losses – look to pivot toward profitability.
Officials from all four market share leaders – DraftKings, FanDuel, BetMGM and Caesars – have touted their collective multi-billion-dollar blitz of advertisements, free bets and other promotions as a way to acquire and eventually retain long-term customers. These eye-popping spends come under further scrutiny as gaming industry stocks have fallen (alongside much of the larger market) dramatically this calendar year from the record-setting highs set in late 2021.
This, in part, led many of these same officials during last quarter’s earnings calls to promise spending cuts. The pending launches of several more population-rich, sports-crazy states in the coming months could alter this trajectory.Caesars offered $3,000 in first-time customer “risk-free” bets in the weeks following New York’s January 2022 online sports betting launch, in part explaining the massive loss discrepancy between the company’s first two 2022 fiscal quarters. The massive promotion was justified by New York’s large population, but the company was still offering $1,500 to first-time users in Wyoming, the nation’s least populated state, as part of its launch Tuesday morning.
Ohio, where Caesars operates brick-and-mortar properties and has applied to launch its online sportsbook, is set to take its first bets Jan. 1, 2022. Caesars also plans to earn licenses in Massachusetts and Kansas, both of which could launch their respective sports betting markets in the coming months.
It remains to be seen what type of marketing or promos Caesars will channel into these new states. However, it’s clear the third quarter build-up to football season will be critical.
Overall, the company reported $2.82b in overall revenue for the quarter, narrowly topping its consensus revenue estimates. The company missed consensus earnings per share projections.
Caesars reported a second-quarter consolidated EBITDA record for brick and mortar properties, backed by an all-time quarterly EBITDA record in Las Vegas.
Caesars stock briefly jumped after announcing its Q2 results shortly after regular trading hours Tuesday before declining as much as 3%.
The company’s stock finished up more than 6% during regular trading hours Tuesday following a down day for the markets overall following a late pullback. Caesars stock has dropped more than 27% over the past three months.