Strong Digital Performance and Two Major Sales for Caesars

By John Isaac,
Editor at online-gambling.com

John Isaac Editor at online-gambling.com

John Isaac is an editor with many years of experience in the gambling industry. He writes expert articles on card games like blackjack and poker. In addition, he is also well aware of the US gambling laws and the Indian and Dutch gambling markets. You can rely on verified information and insightful details.

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Last updated: November 14, 2024

Caesars Entertainment released its Q3 results, reporting a revenue decline despite robust growth in its digital segment. In its October 29 statement, the company highlighted a slight drop in GAAP net revenues to $2.9 billion from $3.0 billion in Q3 2023. Caesars also posted a net loss of $9 million. The quarter revealed strong digital performance and key asset sales, which might help with debt reduction strategy.

Q3 Revenue Decline Despite Digital Growth

In Q3, Caesars’ overall revenue fell by 4% year-on-year, due to challenges in its regional operations. Revenue in its Las Vegas properties also dropped by 5.2%, primarily because of declines in casino gaming revenue. CEO Tom Reeg attributed the regional revenue decline to factors such as new competition, ongoing construction, and challenging year-over-year comparisons. He noted that in Las Vegas, however, the company achieved record hotel, food and beverage, and banquet revenues.

“During the third quarter, we delivered another quarter of $1 billion of same-store consolidated Adjusted EBITDA,” Reeg said in an investor call. “Results in Las Vegas reflect record Q3 hotel, food and beverage, and banquet revenues driven by strong occupancy and cash ADRs.” Despite this, Caesars closed the quarter with lower group revenue as losses in other segments offset the Las Vegas gains.

Digital Success and EBITDA for Caesars’ Q3

Caesars Digital was successful in the third quarter, posting impressive growth. Revenue from Caesars Digital rose by 40.9% to reach $303 million, setting a new all-time quarterly adjusted EBITDA record of $52 million.

The company attributes much of this digital success to updates in the Caesars Palace app, which has contributed significantly to a growing portion of the brand’s iGaming revenue. Contributing to this success was the recent launch of the Horseshoe Online Casino in Michigan. Year-over-year, Caesars’ online casino revenue jumped by 83%, while online sports betting saw a 36% increase.

Eric Hession, head of Caesars’ sports and online gaming division, believes online sports betting’s success is connected to recent app updates. Improved parlay and cash-out options, he noted, have played a key role in driving higher user retention across their digital platforms.

Additionally, Caesars launched its Horseshoe Casino brand in Michigan, Pennsylvania, and West Virginia, with further plans to expand into Ontario and New Jersey. Reeg also mentioned that Caesars aims for broader digital expansion and hopes to operate legal online sports betting and iGaming in all US states as regulations evolve.

WSOP and LINQ Promenade Sales Confirmed

As part of its strategy to streamline operations and reduce debt, Caesars confirmed two major asset sales during Q3. The World Series of Poker (WSOP) brand was sold to NSUS Group Inc., the parent company of GGPoker, in a transaction valued at $500 million.

This sale includes a $250 million cash payment and a $250 million promissory note due in five years. Despite the sale, Caesars will continue to host the flagship WSOP live tournaments in Las Vegas for the next 20 years, and it will retain licensing rights to operate WSOP online poker in Nevada, New Jersey, Michigan, and Pennsylvania.

Additionally, Caesars agreed to sell the LINQ Promenade to a joint venture between TPG Real Estate and Acadia Realty Trust for $275 million. LINQ Promenade is located on the Las Vegas Strip and includes shopping, dining, and entertainment options. Reeg described the LINQ sale as a step forward in Caesars’ debt reduction strategy, allowing the company to focus on core assets and operations.

Caesars’ Q3 results reflect a transitional period as the company balances its growth in digital segments with strategic asset sales to address economic challenges across other areas of its business.