Caesars Entertaiment plans to pivot to a new digital strategy this year after reporting a net income loss of $360 million in 2021 Q4 for the online sports betting and igaming space.
“We couldn’t be happier with where we are in digital in regards to how quickly we’ve become a player in the space, so we can start pulling back levers to get us to profitability as quickly as possible,” said CEO Tom Reeg on the earning’s call.
Caesars Entertainment also had a full-year net income loss of $580 million and EBITDA loss of $476 million. The full-year figures were primarily driven by major losses in online sports betting and igaming segment. Additionally, the company also showed a total loss per share of $2.07, which was short by $1.12.
Still, the leadership remains optimistic about where the company stands. This is due in part because the company’s revenue was $2.98 billion for the year, which was up 63.9% from the prior year and beat the company’s guidance by $10 million. The company-wide losses also narrowed from $555 million in Q4 2020 and a $2.67 earnings per share loss the year earlier.
Caesars’ New Digital Strategy
During the earnings call, Reeg explained that the company was “behind [in the digital space] until last year” because it needed to develop an app and brand for online sports betting and igaming. When the company moved into the digital space, the company saw it as a major opportunity and planned to spend over $1 billion before moving into positive EBITDA for the segment by 2023.
Now that the company has launched and become active in 11 states, it holds 21% of the entire sports betting market in the United States. According to reports, this exceeded the expectations set by the original launch framework. Reeg said that the company has “reached where we want to reach in terms of customer acquisitions.”
With the launches of New York state and Louisiana in January 2022, Caesars expects that Q1 for 2022 will be the largest EBITDA loss. However, moving forward, the company will change its strategy to reach for profitability.
This will mean a shift in the customer acquisition strategy for Caesars in 2022. In states that are more than a quarter out from launch, Caesars will not be seeking new customers as actively.
“The customer you find in the first quarter after launch is worth around two times someone you get later on,” explained Reeg.
As there are fewer launches in 2022, the company will be pulling back on its ad spend in traditional media like TV. With these shifts and eyes on several new markets, the company expects its digital segment to have a positive EBITDA by 2024, with an ROI of 50% or greater.
New Market Launches In Digital
Leadership pointed to the recent launch in New York as a reason for their confidence. Both customer volume and captured market share were two times what the company anticipated. Over half a million customers signed up in the first month. This number is approaching the equivalent of the total number of users in all other states where Caesars is active. With the influx of new customers, the company was able to track the success of the launch in New York to many smaller bets instead of larger bets that took advantage of discounts.
Caesars also has an eye on Ohio and Maryland for the next big launch opportunities. The goal for the online launch in both states is before the end of 2022, however little progress has been made so far.
At the same time, the company is putting less emphasis than its competitors on Illinois and Ontario. Illinois will be removing the in-person registration for online sports betting on March 5, 2022, and Ontario is expected to launch on April 4, 2022. For Caesars, fewer customers are up for grabs in these locations because other major sportsbooks like DraftKings, FanDuel, and Barstool Sports are either entrenched in the market or have made plans to be.
Jackpot besar Togel Singapore 2020 – 2021. Undian terbesar yang lain-lain muncul diamati secara terprogram via info yang kami sampaikan pada website tersebut, lalu juga bisa dichat terhadap petugas LiveChat pendukung kita yg ada 24 jam Online untuk mengservis semua maksud para pemain. Mari segera sign-up, serta kenakan cashback Undian dan Kasino On the internet terbesar yang hadir di laman kita.