Caesars Entertainment 2Q report adds digital reporting, touts post-pandemic gains

Caesars Entertainment 2Q report adds digital reporting, touts post-pandemic gains

  • Rege Behe, CDC Gaming Reports
August 4, 2021 5:13 PM
  • Rege Behe, CDC Gaming Reports
  • Other

The ongoing emergence of online sports betting and igaming is now reflected in Caesars Entertainment’s quarterly reports. During Tuesday’s investors call, the gaming operator announced it is breaking out sports and igaming into a digital segment, which includes sports betting, igaming and poker, for reports.

“Now you can see Caesars Digital on its own. You’ll be able to measure our progress,” CEO Tom Reeg said.

The quarterly report was issued a day after Caesars Entertainment launched Caesars Sportsbook, its new mobile sports betting app. Caesars Entertainment also finalized a deal in April to acquire sports betting operator William Hill for $4 billion.

For the second quarter, Caesars Entertainment generated net revenue of $2.5 billion, compared to $127 million for the same period in 2020. The large revenue difference reflects the closing of properties due to COVID mandates in 2020.

For the quarter, Caesars Digital generated $86 million in revenue, with the company’s regional properties bringing in $1.5 billion. Caesars’ Las Vegas properties accounted for $855 million, and its managed and international properties $66 million. Corporate and other revenue streams generated $5 million.

Net income for the quarter was $71 million, compared to a net loss of $100 million in the same period last year. Regional properties were responsible for $251 million in net income and Las Vegas properties generated $184 million. These net gains were countered by losses in corporate (-$329 million), Caesars Digital (-$22 million), and managed and international (-$13 million).

Reeg anticipates spending $1 billion during the next two and a half years to build its online customer base. The company currently operates sportsbooks in 17 states and Washington, D.C., 13 of which offer mobile sports betting. An ad campaign featuring comedians J. B Smoove and Patton Oswalt will debut this week during a U.S. men’s basketball game at the Summer Olympics.

Reeg said these investments can yield profitable returns.

“I think that we can generate cash-on-cash returns in this business at maturity well in excess of fifty percent of what we’ll invest,” Reeg said. “But we realize what we operate in is a world that is competitive and that we have to jump in and compete. … I’d expect at maturity to be generating at least fifty percent, possibly approaching one hundred percent of that.”

Reeg added, “If I could find a brick-and-mortar investment like that, we would do that every day of the week.”

When asked about online revenues from sports betting and igaming – some analysts think the latter will be more profitable – Reeg said he thought revenue generated would be fairly equitable, even though igaming is arguably more profitable.

“I think they end up fairly evenly split, because fewer icasino states are available than there are sports,” Reeg said. “On a per-state basis, I think icasino is considerably more profitable than sports.”

Caesars Entertainment also reported an occupancy rate of 89% at its Las Vegas properties for the quarter.

“June was better than May and then July was better than June,” Reeg said. “And I would expect that third-quarter occupancy will finish significantly ahead of second quarter’s 89%.”

Morgan Stanley analyst Joseph Greff said that gains at Caesar Entertainments’ Las Vegas and regional properties help mitigate “an EBITDA loss/drag from digital (mobile sports betting and igaming).”

“While delta variant spikes warrant serious attention to assess the impact on fly-to Nevada and drive-to casino (regionals) patronage,” Greff said, “ July thus far has been encouraging and the new Nevada mask mandate has yet to disrupt, so far, the strong operating momentum.”

Rege Behe is lead contributor to CDC Gaming Reports. He can be reached at Please follow @RegeBehe_exPTR on Twitter.