Caesars Entertainment started its Q3 2023 earnings call by announcing the strongest consolidated adjusted EBITDA quarter in the history of the company. While Caesars has a strong retail presence, especially with great contributions from Las Vegas, the company’s digital segment also had a terrific quarter.
Caesars recorded an adjusted EBITDA profit of $2 million in Q3 vs. a $38 million loss this time last year. This appears to be the start of an incredible turnaround for Caesars and a sign of more to come.
Caesars online segment continues to grow, especially its Pennsylvania online casino
Caesars saw its online casino handle increase 38% in Q3 2023. Despite Eric Hession, President of Caesars Sports and Online Gaming, noting that revenue was negatively affected, that was not the case in Pennsylvania.
PA online casinos have shown a propensity to grow over the last several months. Operators reported an all-time high of $187.3 million in September revenue. The Harrah’s Philadelphia license, which operates Caesars Casino PA and Tropicana Casino PA, also posted a record amount of $7.5 million in revenue last month.
Harrah’s Philadelphia has seen an increase in revenue across all three quarters this year:
- January: $4.6 million
- February: $5.9 million
- March: $5.8 million
- Total: $16.3 million
- April: $5.5 million
- May: $6.2 million
- June: $6.8 million
- Total: $18.5 million
- July: $6.3 million
- August: $6.4 million
- September: $7.5 million
- Total: $20.2 million
Much of the success in Q3 could be attributed to the new standalone app Caesars launched in the middle of August. Caesars is still waiting for the app to take form, which should do so in Q4 and beyond in 2024. Hession said during the Q3 call:
“Keep in mind, during the quarter, we didn’t have our app with the exception of basically for one month as we were putting it in for the first two months of the quarter. So again, most of the upside from the new app is going to accrue in the fourth quarter and into next year.”
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New Caesars Casino PA app attracting slot players
The good news for Caesars is that, as Hession mentioned, it hasn’t fully reaped the benefits of the new standalone online casino app yet. The company has essentially had one full month of its use.
Hession said that the new platform enables Caesars to improve integration of game vendors, segmented marketing and Customer Relationship Management (CRM) processes. The new online casino is also attracting a higher number of PA slots players.
“The thesis of the new iCasino app is following exactly the script,” Hession explained. “We’re seeing a much higher percentage of slot players, which if you recall on our prior app, was heavily table-focused. As a result, we’re seeing improved hold in that particular app, which we think over time will ultimately create a whole lot more value for us.”
Hession later added on the call that Caesars designed the app to be similar to a traditional casino experience. Since Caesars has an incredibly well-known retail brand, including Harrah’s Philadelphia, the goal of the app is to complement the land-based business. Hession said:
“I think over time, our real differentiator, though, is the ability to cross-sell between online and brick-and-mortar. And so we’re eagerly looking forward to working with the software providers to provide games and promos and jackpots that span both brick-and-mortar and digital.”
Caesars looking to add new PA online casino skins
The benefit of owning a license in Pennsylvania is the ability to operate multiple online casino platforms. For example, Hollywood Penn National is partnered with the following apps:
Harrah’s Philadelphia is obviously partnered with Caesars Casino PA, however, it also launched Tropicana Casino PA earlier in the spring. Now Harrah’s Philadelphia has two different platforms under its license. It has the same setup in New Jersey, too.
Since the Pennsylvania Gaming Control Board (PGCB) allows licensees to operate multiple online casinos, Caesars has not ruled out launching more. Hession said:
“We are exploring the possibilities of adding another skin to the portfolio, as there are a number of states where we have additional licenses that we’ve reserved and would plan to potentially roll that out later in 2024.”
Whether it be mastering the newly minted online casino app or offering additional skins, there are multiple ways Caesars can continue to grow in Pennsylvania and nationwide.