Caesars Entertainment’s revenue in the first quarter of 2024 was down 3.1%. But don’t blame that on its casino in Danville.
As the company continues to build its permanent Caesars Virginia resort in Danville, its temporary casino in the city remains the second most popular in Virginia.
Caesars also has the fourth most-profitable sportsbook in the state.
1Q earnings Came In 3% Below Wall Street Projections
Caesars’ temporary casino in Danville celebrates its one-year anniversary this month. It is one of just three casinos currently open in the commonwealth. Virginia online casinos remain illegal. The company launched its Virginia sportsbook in early 2021. It enjoyed just over 6% of market share in Virginia during the first three months of 2024.
During its first quarter earnings call, Caesars reported a drop in consolidated net revenue to $2.7 billion in the first quarter of 2024. That was about 3% less than Wall Street estimates. The gaming company also experienced a 10% decline in its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).
The unfavorable results can be attributed to several low transitory issues throughout the quarter. They include low table holds in the Las Vegas segment as well as inclement winter weather in some of its regional segments.
Caesars Enjoyed Some Successes in Q1
There were some bright spots for the company in the first quarter. Caesars reported record occupancy in Las Vegas, driven by strong visitation. Occupancy was at 97.6% January through March.
The gaming company also experienced a 23% OSB (balance of principle to be repaid) growth and 54% casino net gaming revenue growth in its digital segment.
Caesars Digital delivered $282 million in net revenue, up 19% year over year. It also generated $5 million in adjusted EBITDA during the first quarter.
Positive results in the digital segment were driven by strong momentum in both online sports betting and online casinos during the quarter. Online sports betting net revenue grew by 23%, while iGaming delivered 54% net revenue growth.
In the online sports betting segment during Q1, hold increased 80 basis points year over year. Despite the increase, though, it was at the lower end of the company’s expected range due to less favorable results from the Super Bowl and March Madness.
Online casinos set new quarterly records for active customer volumes and net gaming revenue. This was driven by Caesars’ new online app. Although launched only nine months ago, it already makes up roughly 50% of all gaming revenue in this segment. Customers continue to be pleased with the product interface, game content and improved loyalty marketing, Caesars reported.
In Q1, Caesars also successfully launched mobile sports betting in North Carolina, said Caesars’ CEO Tom Reeg.
“There, we were encouraged by favorable early results and witnessed new customers signing on at a faster pace than prior state launches, translating into a higher initial market share.”
Regional Shortfalls Hurt Caesars’ Bottom Line in Q1
A look at the regional segment in Q1 shows Caesars delivered $433 million in adjusted EBITDA, which was down 3% versus last year. The drop can be linked to unfavorable weather during the first six weeks of the quarter.
However, regional trends improved each month throughout the quarter, with March delivering positive revenue and EBITDA growth.
Similar to prior quarters, Caesars continues to face new competition in a few markets as well construction disruptions in New Orleans. The company said these negatives were somewhat offset by the successes of its new casinos in Danville and Columbus, Nebraska.
Caesars also has several construction projects it plans to complete in 2024 from which it expects strong returns. One of those projects is the permanent facility in Nebraska, which will open May 13. Construction on the New Orleans facility should be completed by Labor Day.
Caesars expects to open its permanent casino in Danville by the end of the year. Perhaps due to revenue shortfalls in Q1, Caesars has renegotiated its contract on Caesars Virginia. The upshot is fewer total jobs created, smaller square footage, and the removal of some planned projects.
Caesars working on Shared Wallet Technology
In the earnings call, Reeg said the company intends to remain focused on several key priorities for the remainder of the year.
In its sports betting segment, Caesars will continue its work to create a shared wallet so players can play from the same account across state lines. It hopes to introduce the feature by mid-2025.
It plans to continue improving its products by enhancing same-game parlay live wagering and internal pricing.
In the online casino segment, Caesars will continue to add additional game content and functionality. It is on track to launch its new online casino brand in the second half of 2024.
Currently, Caesars Entertainment offers sports betting in 31 North American jurisdictions, 26 of which offer mobile wagering.
