Caesars Preview: Did Company Hit New Structural Hold Target?


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The time, effort and dollars that went into building out the Caesars digital business could finally be about to pay off.

Caesars has reported four straight quarters of positive digital EBITDA, although not quite at the run rate it is seeking. Management expects to hit that $500 million run rate at some point in 2025, though a strong third quarter that includes a full month of NFL betting could give the market a preview of what digital can produce.

Caesars reports its second quarter earnings on Tuesday at 5:30 pm Eastern.

Caesars raised hold target

The president of Caesars Digital confirmed during the first quarter earnings call that Caesars now expects to hit an 8.5% hold.

That is because of the growing and improving product offering, which just about every sportsbook continues to work on while chasing market leaders DraftKings and FanDuel.

“Higher parlay mix gives us confidence in our ability to continue to improve holds throughout 2024 and beyond,” Eric Hession said.

Caesars reported a 6.7% hold in the first quarter despite a tough Super Bowl outcome. Handle was about flat but net revenue was up more than 18%, as the percentage of parlay bets increased 4 points compared to the prior year.

iGaming carrying the water

The slow second quarter presents a good opportunity to showcase the strength of its Caesars Palace online casino as well.

Hession said the app already accounted for more than half of net gaming revenue for the digital segment in the first quarter. That was with the product still being relatively new after a September launch and a busy sports schedule to contend with.

Football and basketball bettors have more of their gambling bankroll available for online table games during the second quarter. Summer tends to be a slow time for iGaming too, though, with people on vacations and out of the house more than in cold months.

Caesars Rewards helping share?

Hession was also bullish on the impact of Caesars Rewards now that the product is improving. He noted at a Stifel conference in June that the product is competitive enough now that customers who value the loyalty program are no longer switching to different apps to place bets.

Steve Wieczynski of Stifel said the “best-in-class” loyalty program is a “significant competitive advantage.”

Barry Jonas of Truist also suggested both Caesars and BetMGM have a competitive advantage, given their databases and loyalty programs as long as the platforms are similar enough to the leaders.

Photo by Shutterstock/E. O.