Caesars Touts Sports Betting Future As Positive Despite Quarterly Loss

Posted on March 5, 2021 - Last Updated on March 7, 2021
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Written By on March 5, 2021
Last Updated on March 7, 2021

Caesars Entertainment is confident 2021 will be better than 2020.

Last week, the company reported a loss of $555 million in its fourth quarter. During its fourth-quarter earnings call, Caesars executives laid out the positives. At the top of the list was the recovery of the tourism industry and its Las Vegas properties.

Not far behind: sports betting and iGaming are also points of optimism moving forward this year.

William Hill deal expected to close in coming months

With two regulatory meetings and a final UK court date, Caesars CEO Tom Reeg expects the William Hill acquisition to close shortly after. Reeg couldn’t talk specifics about the $3.7 billion deal much more than that.

“We are working through all of the integration of William Hill particularly on the tech side,” Reeg said. “We will be well-positioned to have one of the best apps in the industry integrated into Caesars Rewards on both the sports side and casino side by the beginning of the football season in 2021.”

The combined entities could generate $600-$700 million in pro forma revenue in its 2021 fiscal year.

Caesars boost expected for William Hill?

William Hill is in a holding pattern since the deal announcement, according to Reeg.

“They had a brand they knew would go away as a main driver of the business. So it made little sense to spend a lot of money to build the brand that’s going to change in early 2021,” he said. “We have not been in charge of the that. We’re in this to be a winner. And if the answer is we need to invest more money to build market share, you should expect we would consider that.”

Beyond the William Hill deal, Reeg said the investment into daily fantasy sports operator SuperDraft was “at an attractive acquisition cost and the ability to fold into Caesars Rewards quickly.”

That deal fills an “obvious hole” in the Caesars business, determined by conversations with sports team partners and the NFL.

Caesars’ push in sports betting

As Caesars waits for the William Hill deal to close, its mobile sportsbook is live in Indiana, New Jersey, Nevada and Pennsylvania. William Hill is in 11 states with Tennessee expected to launch soon.

Speaking in generalities, Reeg said sports betting will be a 25-30% EBITDA margin business at maturity for companies in the top-tiers of market share.

He expects Caesars to operational in 20 online jurisdictions by the end of 2020.

“We have access to 80% of the population in our system,” he said. “You should expect us to be pursuing the opportunity every we can.”

Big hopes for iGaming

Sports betting and iGaming operations will integrate into Caesars Rewards in the coming months. Reeg said there are major opportunities ahead in iGaming.

In three states, Reeg said it’s a total market already pushing $3 billion. He does expect the opportunity will trail sports betting legalization significantly.

“We are significantly profitable there,” he said. “We are well-positioned there and in sports and we’re well-positioned to take advantage as iGaming continues to roll out.”

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Pat Evans

Pat Evans is a Las Vegas-based reporter covering sports business. Evans previously worked at Front Office Sports and the Grand Rapids Business Journal. He has authored two books: Grand Rapids Beer and Nevada Beer.

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