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  • Q1 2024: Caesars revenue drops 3% due to Las Vegas headwinds
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Caesars Entertainment reported a 3.1% decline in revenue to $2.74bn in Q1 2024, driven by a 9.1% drop in the business’ Las Vegas revenue to $1.03bn.

The operator reported it faced several transitory issues during the quarter, including a lower than expected hold in Las Vegas, and winter weather in the regional segment.

Caesars also saw a loss on its North Carolina online sports betting launch, which further hit the results.

The company’s EBITDA declined 11.0% from Q1 2023 to $853m during the quarter.

This resulted in a widening net loss during the period to $158m, compared to $136m in the first quarter of last year.

The business’ share price has largely recovered from a steep initial drop following the announcement of the results.

CEO Tom Reeg said: “We are not in the habit of delivering quarters that look like this.

“This was not an instance of a few players beating us, this was kind of a repeated butt kicking, broadly based throughout the quarter.”

Digital was a bright spot in the results, as revenue from the business’ online operations grew 18.5% to $282m.

This included 23% online sports betting growth and a 54% year-on-year iGaming revenue increase.

Reeg added: “If you look at digital, North Carolina for us was a much more successful launch in terms of customer acquisition than we were anticipating.

“And then what we have seen in recent states, we didn’t make any change to how we promoted into it.”

Reeg said Caesars now has a 9% market share in the Tar Heel state, approximately three times the firm’s typical state market share.

However, the $5m in EBITDA generated by the digital business came in below expectations, according to analysts at JMP Securities.

Analyst reaction

JMP said it believed the way forward for Caesars’ digital operations is multi-pronged, involving a second brand strategy, as well as iGaming investment and OSB margin expansion.

Caesars has previously expressed its intention to launch a second iCasino brand in the US.

The analysts maintained Caesars’ Market Outperform rating but lowered their price target to $60, down from $62.

The analysts also highlighted Caesars’ decision to reiterate its $500m online EBITDA target by 2025.

JMP said: “Operationally, the company stated it may fall short of the target, but the roll off of marketing arrangements will bridge the gap.

“As a result, growth in 2026 could slow, but investors should give credit to the valuation in the meantime if the EBITDA target is achieved, in our view.”

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