The last time Caesars CEO Tom Reeg addressed the company’s sports betting and casino apps, he was “cautiously optimistic” they had seen their last quarter of losses.
Investors will see those results Tuesday when Caesars reports earnings for Q2. Reeg and his contemporaries at DraftKings and BetMGM forecasted their online sports betting businesses hitting quarterly profitability by the end of the year. With a clearer picture of the quarter, though, some goalposts are moving,
The global entertainment and hospitality giant’s online sports betting and iGaming venture, Caesars Digitial, has lost more than $1 billion to date.
Profitable online gaming in Q2
Caesars Digital would have been profitable in Q1 if not for the expense of launching in two new states or the Super Bowl, when the William Hill app unexpectedly went down in Nevada, according to Reeg. The segment did improve its losses in Q1, reporting $4 million in lost EBITDA, as opposed to $554 million the year prior.
No states launched sports betting or iGaming in Q2, one of the bearest times of year for sports. Meanwhile, BetMGM reported its first quarterly profit, while others expect DraftKings to do the same later this week.
Like those apps, Caesars cut costs through expiring partnerships and scaled-back promotions to start the year.
Caesars hopes to carry momentum into football, iGaming expansion
Promotional spend is expected to uptick across the board in Q3 when the sports calendar emerges from its summer lull with NFL and college football, making Caesars Digitial chances of a profitable third quarter a “coin flip,” Reeg said during the company’s last earnings call.
Reeg will likely address the company’s launch of its standalone sports betting app on Tuesday’s call.
Before launching the Caesars Palace app Monday, Caesars Sportsbook housed both the brand’s online sports betting and iGaming products. Reeg teased the app during the company’s last earnings, calling it one of the brand’s biggest opportunities for third-quarter growth.
It is live in Pennsylvania, Michigan and West Virginia, with plans to launch in additional states by the end of the year. CZR stock was down 1.5% as of Tuesday afternoon.
