Caesars Has Tough Q4 in 2023, But Sees Growth in Digital Platforms

Despite posting a net loss in the fourth quarter of last year, Caesars Entertainment still highlighted the growth of the online gaming and sports betting wings.

In total, Caesars saw a net loss of $72 million in the quarter. That’s an improvement over the $148 million loss from the same period in 2022, but it did not provide the same value boost as many analysts predicted. It reported a 14% increase in the betting handle during Q3, allowing it to rack in a positive adjusted EBITDA of $2 million.

Strong Year Despite Fourth Quarter Loss

Caesars Entertainment had a solid year throughout 2023. Total revenue for the group over the year came up to $11.53 billion, allowing it to return to a net profit for the year despite the rough end to 2023. Despite the optimistic view, the group’s revenue for Q4 2023 only amounted to a 0.1% increase in revenue. 

Share prices were hit as its loss per share came up to $0.66 in Q4 2023. Its GAAP (Generally Accepted Accounting Principles) loss for the quarter clocked in at $0.34 per share, while gross margin also fell by 2.8% compared to Q4 FY2022. 

Caesars’ momentum has taken a hit and struggles to keep up with the growth it realized in the two years prior to 2023. At day’s end on February 20, 2024, Caesars shares were trading at $41.65 soon after its earnings call, a fall of 2.02% due to investor speculation based on the company’s performance. 

Despite the various hiccups, the group declared impressive year-on-year growth across its Las Vegas and other regional operations. According to a brand spokesperson, its standout performance for the year came from its digital division, with revenue from Caesars Sportsbook and online gaming growing by 77.6% over 12 months. 

Group spending was also relatively throttled, allowing 2022’s net loss to turn into a net profit, while also boosting the company’s adjusted EBITDA. According to Eric Hession, president of Caesars Sports and Online Gaming, the year’s focus had been digital growth all along, as he highlighted record revenue and adjusted EBITDA for his division. 

“The core iCasino slot customer has responded positively to our significantly improved offering,” Hession said. “We’re pleased that the new product and brand resonate much better with our Caesars Rewards database than our casino associated with the sportsbook. iGaming remains a critical component of our digital growth strategy for 2024 and beyond.”

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Caesars Business Verticals Grow in 2023

Overall casino performance for the year increased by 6.2% to $6.36 billion. Room revenue for the brand grew to 6.8% to $2.09 billion while food and beverage revenue also rose by 8.3% to $1.73 billion. The brand’s other miscellaneous revenue sources also grew by 5.7% to $1.43 billion. 

Caesars’ regional businesses remain the core source of its revenue, as it increased by 1.3% to $5.78 billion for 2023. Its Las Vegas flagships earned $4.47 billion to post a growth of a significant 4.3%. The brand attributed the growth to several key developments over the year, including the first ever Formula 1 race weekend in November. 

Overall, Caesars Digital experienced the most growth of any of the company’s verticals, as its revenue nearly doubled from $548 million to $937 million. The company also posted another $307 million in revenue from corporate and other activities. Overall, the company’s operating expenses for the year were 0.3% lower than the previous at $9.06 billion, leading to an overall pre-tax loss of $60 million. Overall, its EBITDA for the year increased 21.7% to $2.92 billion overall.

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