A little more than a month into mobile New York sports betting and close to eight weeks into the new year, Caesars Entertainment appears to be happy and content on where the company is heading.
That sense came through Tuesday as Caesars had its 2021 fourth quarter and full year earnings call.
Last year, Caesars generated $337 million in gross gaming revenue from its online sports betting and casino gaming divisions, but its massive expenses dropped the company’s net revenue to a loss of more than $580 million, with more than half the company’s overall net losses coming from Caesars Digital.
“Our quarterly operating results reflect new fourth quarter records for Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and Adjusted EBITDA margin in both our Las Vegas and Regional segments,” Tom Reeg, chief executive officer of Caesars Entertainment, Inc., said in the financials release. “Caesars Sportsbook continues to exceed our expectations for new customer registrations, deposits and market share, especially in recently launched jurisdictions.”
Caesars Finished First for Month
Last week, Caesars Sportsbook New York finished third for the week among licensed operators, but was in first place over the first 30 days of launch in the Empire State with a handle of $702.65 million. Its weekly Gross Gaming Revenue (GGR) was its lowest so far at $5.82 million.
You can find the latest updates from Caesars and other operators on EmpireStakes.com by checking out our New York sports betting promo codes.
“New York was obviously an eventful launch for everyone. The volumes in New York were about two times what we were anticipating, and our market share was about two times what we were anticipating as well,” Reeg said on a conference call after figures were released. “So, we signed up about 500,000 customers in New York since we launched. New York is approaching as large as the rest of the business in Caesars Digital combined. And we're extremely pleased with how we came out of the box.”
Caesars, which is now in 22 states (16 with mobile sports betting), generates more than 90% of its handle from mobile sports betting and iGaming. It also has 21% of the sports betting market in the country.
New York does not have real money online casinos, as some neighboring states do.
Company Will Need to Slow Advertising
With spending, catching up to full speed with other competition and a limitless promotional push, look for J B Smoove (Caesar), Halle Berry (Cleopatra) and the Manning family to be on a long sabbatical.
“It was as if you were getting ready to drink from a garden hose and then a tidal wave came and hit you,” Reeg said. “It was absolutely staggering the demand in New York. To give you an idea, we had 75,000 inquiries to our customer service portals in the first two days post launch in New York.
“It was two times what we were expecting in terms of volume and our share was two times of what we were expecting of that volume. We have more market share than we anticipated in New York, so the cost of that launch is more than we had originally modeled. But that's also part of the reason that we can start to dramatically decrease on traditional media immediately and end up in about the same place, except with much more share than we anticipate. We will continue with customer acquisition moves, but the company has reached its goals. We couldn’t be happier where we are.”
Will Caesars Pursue a Downstate Casino in NY?
Is there any interest, Reeg was asked, in a land-based casino in New York l down the line? The state last year asked for parties to declare interest for downstate casinos.
“So in New York, how do I answer this politely?” Reeg said. “New York is a difficult regulatory state. I think it's going to be extremely expensive to build there. I think it's going to be an extremely expensive license fee. And I think there's a likelihood that you're going to have to solve some other problem of the city in addition to creating the jobs that you do in building a casino. So it's not going to be enough to pick a site, build a casino, create the jobs and generate a return. There's going to have to be other investment there as well.
“On our balance sheet, it's extraordinarily unlikely that we make a material investment into New York land based. Now there are others that take a different view in terms of the investment opportunity there for a variety of reasons. If one of those developers wants to talk to a manager that brings 65 million reward members and powerful brands, we'd be very interested in having that discussion.”