F1 race lights in front of Caesars Palace on Wednesday, September 20, 2023. (Ryan Matthey / 8NewsNow)
LAS VEGAS (KLAS) — After reaching nearly $1 billion in net revenue from online gambling in 2023, Caesars Entertainment Inc. is even more excited about its digital casino in 2024.
Caesars Entertainment reported that its digital gaming division generated $973 million in revenue for the year. This is an improvement of 77.5% compared to 2022, and Caesars' Palace iCasino app will also attract attention. Caesars is affiliated with Sault Ste. Marie Tribe of Chippewa Indians takes over operations of Wynnbet in Michigan. The venture plans to add other services for Caesars' online customers, pending regulatory approval.
Anthony Carano, president and chief operating officer, said this year is a breakthrough year for digital gaming.
“We're particularly excited about what's happening at iCasino,” said CEO Tom Reeg.
The announcement came just before Caesars Entertainment's fourth-quarter/full-year earnings call with analysts on Tuesday.
Caesars' annual net revenue was $11.5 billion, with 2022 net revenue of $10.8 billion. The fourth quarter was $2.83 billion, slightly higher than 2022's $2.82 billion.
It was the latest glowing report from casino giants MGM Resorts International, Wynn Resorts, Red Rock Resorts and Boyd Gaming on a record year of casino profits. While MGM and Wynn reported significant boosts from the F1 Las Vegas Grand Prix, Reig was a little more modest.
“We all know that even if only a small number of buildings in the market benefit from this, it's not going to be a super long-term event,” he says. Caesars Palace and Paris Las Vegas (his two Caesars properties on the course on the Las Vegas Strip) shared the event's best success, but adjustments are sure to be made at other resorts for this year's race. The company had expected a 5% profit increase, but it ended up around 4%.
“The cheapest event tickets were expensive by any measure,” League said. This time, they hope for “more friendly participation.”
And that might have been better for Caesars Entertainment. Rieg considered several factors that prevented the company from achieving even higher numbers.
- When Caesars began saving money to pay for raises for employees that were part of the culinary union contract approved starting in November, they had estimated a lower amount. “Catch-up” payments were deducted from income.
- “We turned the Tower of Versailles that we were converting in Horseshoe into the Tower of Versailles in Paris. Those rooms were completely offline in the quarter, so we sold 65,000 rooms at 200 ADR (average daily rate). occupancy has decreased,” League said. The project is not finished yet. “We are building a bridge that will connect that tower to the old horseshoe, or Paris,” he said.
- The $20 million hit in November was due to casinos losing bets as gamblers tried to retaliate.
- Construction disrupted operations at the company's regional properties in New Orleans and Indiana.
Much of the construction work has been completed and management expects strong performance in 2024.
Analysts appear skeptical that Caesars will improve on its record numbers in 2023, but League said it will generate higher profits in real estate in Las Vegas and the region.
If profits are this strong, will Caesars be in a position to buy or sell Las Vegas Strip real estate again?
League said Caesars is more likely to reduce its debt levels and buy back its own stock. But he left the door open.
“Everything is for sale every day in public companies, and we're not going to do anything ourselves,” Reeg said.
