Caesars Entertainment Q3
The top line
- Net revenues of $2.7bn vs. $1.4bn Q321, net loss of $233m vs. -$926m YoY.
- Caesars Digital net revenues of $96m ($221m YTD), EBITDA loss of $164m ($171m YTD).
- LV net revenues $1.017bn, up 234% YoY $304m; adj. EBITDA of $500m up 44% vs. Q319; regionals $1.54bn vs $1bn Q320, AEBITDA $567m vs. $350m Q320
- Caesars had $15.2bn in outstanding debt and $1.1bn on the balance sheet.
Bring me your tired, your poor: Praising Caesars’ progress on the digital front, CEO Tom Reeg said the group had recorded Q3 handle of just over $1.7bn, but over the course of October alone handle had reached $1.3bn, which one quick-thinking analyst noted represented c20% share. Reeg pointed out that the group achieved 12% share of OSB handle in non-Liberty states and in the jurisdictions where the Liberty platform was live, share of handle had reached 17%. The handle figure was reached without “adding fantasy (DFS) or horse racing: it’s pure sports betting handle and it continues to generate momentum,” he said.
Up on the roof: Reeg once again talked up the 65 million-strong Caesars rewards program, which he said brought in 30% of new customers to the Caesars sportsbook. Those players made up 50% of its OSB handle during Q3, with many of those players being higher spenders “betting large amounts and making their way into our system.”
Sports betting and volumes on parlays had grown significantly thanks to the company launching its marketing campaigns in early August, brand awareness levels had gone “through the roof” since then, Reeg said.
Non-compete: Caesars’ icasino offering however will have to wait until it’s been rejuvenated with fresh content.
“The platform is non-competitive,” Reeg said, “we’ve not spent money promoting icasino until we have a broad array of games. This should take place by year end and we’ll talk more about it then.”
The hold up revolves around getting content approved in different states, but this wasn’t due to states dragging their feet, Reeg said, “William Hill when it was under UK ownership didn’t provide the resources to its US business to develop its icasino platform and we’re now putting resources into igaming to catch up with OSB.”
Payment plan: Caesars’ focus will be on paying down debt in the next 12 months, Reeg said. It will start the sale process of one of its Strip assets in early 2022 as part of “a massive cash generation” exercise. It will also include the $1.2bn recouped from the sale of Hill’s non-US assets, the sale of its stake in Neo Games (amount undisclosed) and its brick and mortar activities generating $2bn in FCF. Caesars will be very “aggressive on the refinancing front to lower debt cost” and expects to have “well in excess of $5bn cash to deploy”.
