Caesars Entertainment highlighted the growth and profitability of its digital segment Tuesday (Oct. 31) during its third-quarter earnings call.
The digital segment generated $2 million in adjusted EBITDA during the third quarter, marking the second consecutive quarter of profitability, Eric Hession, co-president of Caesars Sports and Online Gaming at Caesars, said during the call. This is a significant improvement compared to the same quarter last year when the digital segment had an EBITDA loss of $38 million.
“We’re particularly pleased with the way the fourth quarter has begun in digital, excited about the momentum that we’ve got in online casino now that we’ve launched Caesars Palace Online and what we’ll be able to deliver in the coming quarters,” Caesars CEO Tom Reeg said during the call.
Caesars Palace Online Casino, which is the firm’s new online casino mobile app and online gaming platform, was launched in August, according to a press release.
The growth of the digital segment can be attributed to increased online sports betting and iGaming, executives said during the call. Caesars Entertainment is committed to investing in its digital segment to enhance the customer experience and drive long-term EBITDA growth. The company has focused on improving product features, including enhanced game content and functionality, as well as implementing segmented marketing strategies.
“Product is quite important,” Hession said during the call. “I think it manifests itself mostly in retention, because trial, you can get that right away, and then it’s a question of how much people are going to continue to play and then how much they play once they do.”
The company’s robust technology plan also includes the rollout of a proprietary Player Account Management (PAM) system, executives said during the call. The PAM system enables a shared wallet and improves application stability, ease of use and app speed.
As the digital business expands, it’s also drawing new customers both online and in Caesars Entertainment’s brick-and-mortar locations. Reeg said during the call that while sports betting tends to draw customers who are younger and male, the more recent addition of Caesars Palace Online Casino has appealed to customers who are older and female.
“It’s been accretive to brick-and-mortar in that customers that we found through digital or reactivated in digital showing up in brick-and-mortar continues to increase as the quarters pass,” Reeg added. “So, very pleased with how that business is developing.”