This week saw Caesars Digital post its earnings report for the third-quarter of 2023. The brand enjoyed a largely positive upturn in its sports betting and casino gaming handle, and there was a knock-on effect to its revenues.
Much of this is down to the brand’s prudent use of promotions as well as a successful roll-out of new features such as NFL streaming. However, it remains to be seen whether Caesars can catch up to the market-leaders.
Caesars Digital, the parent company of Caesars Sportsbook, has produced a positive earnings report in the third quarter of 2023. The brand reported $2 million in earnings which is a dramatic improvement compared to the losses of $38 million sustained in the same quarter in 2022.
The digital arm of the company was behind this success with $215 million in net revenues which was up $3 compared to the previous year. So far in 2023, Caesars’ digital net revenue stands at an impressive $669 million which is over twice that of the same time last year.
Caesars saw its sports betting handle rise by 14.3% with over $2.3 billion in sports bets taken, although there was a slight fall in its hold. The brand took in $11 million in horse racing bets for the quarter, which is down $1 million from the same time last year.
The arrival of the new Caesars iGaming app also brought an increase in casino gaming handle of 38.3% to $2.5 billion. This brought in gross online casino revenues of $76.6 million compared to just $62.5 million in 2022
The markets reacted positively to the quarterly earnings report from Caesars. There was an instant 2.5% rise in the Caesars stock price on the day after the report was produced. While this dipped later in the day, it had returned to a growth of 3% the following day.
Investors will have been happy with how Caesars had been tackling the busy sports betting market. The brand has been aggressive in serving up over $52 million in promotions over the past three months which is a $4 million increase over the previous year.
Much of these were due to launches in states such as Louisiana and New York, and the brand is widely expected to tone down its promotional campaigns in the coming months.
There was also a positive reaction to the Watch and Bet product that is now part of the Caesars app and allows viewers to watch live NFL games, while the Caesars Reward program continues to be an attractive part of the brand’s appeal.
Caesars has now successfully launched its sportsbook and casino digital product in many states across the nation, and hopes are that the brand may now start to turn a profit on its operations.
The expectations are that 50 cents for every digital revenue dollar will now come back to the company following costs for payments, tax and other issues. As such, it is hoped that there should be around $500 million in yearly digital earnings by 2025.
However, it remains to be seen whether Caesars has what it takes to take on the perennial market-leaders, FanDuel and DraftKings. While Caesars has upgraded its product in several areas such as same-game parlays for college football, it still lags behind its rivals in offering the same functionality for the NBA and NHL.
Plus Caesars will have to overcome the multiple legal challenges that it faced in the past few months. Following September’s data breach, the brand has had to contend with court action on a federal level and in several states such as Nevada and New Jersey.
This was due to a third-party IT brand having its security protocols bypassed, which meant that the account details of the Caesars Rewards database was severely compromised. Caesars has remained tight-lipped about what losses it might face as a result of any settlements, but it isn’t expected to have a lasting impact on the brand’s fortunes.
Caesars has once again shown that it is a hugely successful sports betting and casino gaming brand. The third-quarterly earnings report showed that the brand enjoyed an uptake in handle and this translated through to some positive revenues.
As such, it’s widely expected that Caesars will shortly start seeing a profit following a period of huge investment in setting up its sportsbook and iGaming product in multiple states. But whether Caesars can ever claim the top sport in the US online gambling industry remains to be seen.
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