Caesars investors and the rest of the industry are waiting to see just how the company’s focus on iGaming worked out in the third quarter.
The company reports its third quarter earnings at 5 p.m. Tuesday. It will be the second US sports betting operator to comment on the quarter after Entain shared limited details about BetMGM.
Investors should be relatively happy should some of the positives BetMGM saw, like improved cross-selling, also wind up in Caesars’ report.
Caesars saw iGaming bump in Q2
The strength of the standalone Caesars Palace app was definitely felt in the company’s second quarter report.
Handle for iGaming jumped 33.2% to more than $3.5 billion in the second quarter. That pushed first-half iGaming handle to above $7 billion, up 38.8% from the prior year.
The standalone app grew at a pace faster than 50% in the second quarter, Eric Hession, Caesars’ president of sports and online, said on the call.
Horseshoe rollout details coming?
The Caesars Palace push was just the first part of the company’s iGaming strategy.
Caesars expanded with its second brand in the Michigan online casino market at the end of September with the Horseshoe-branded standalone app. That came after the company acquired WynnBet’s license earlier this year.
The brand will likely roll out into more iGaming markets where Caesars can launch a second brand. The final stage of the app launch is expected for the first quarter in Ontario.
Hession was bullish on the prospects for the Horseshoe brand on the Q2 call, saying it should “resonate with a lot of customers.”
When will Caesars hit digital EBITDA run rate?
CEO Tom Reeg promised that analysts would “believe” at some point that the digital segment will hit an EBITDA run rate of $500 million in 2025.
The third quarter could muddy that outlook a bit with the first full month of NFL betting. Caesars has been improving its product and acquired ZeroFlucs, which helps with real-time pricing, over the summer.
Those steps, and a growing iGaming share, should all boost digital EBITDA. But Caesars noted in the second quarter that marketing would ramp up in August and September for the NFL season and that acquiring sports bettors had dropped “fairly significantly.”
New 52-week high coming?
Investors would love for the earnings call to serve as a catalyst as it did in July, when the stock jumped 8.3% on more than double its average trading volume.
The stock opened Monday at $44.69, up 11.9% from the post-earnings bump in August and 10% off the 52-week closing high of $49.16 last December.
