Caesars CEO Tom Reeg said the entity lost a little over $400 million in EBITDA during the first quarter of 2022 due to its online sports betting launches in New York and Louisiana — with the majority of that loss coming from the Empire State.
Overall, Reeg said Caesars suffered a digital EBITDA loss of $554 million in Q1.
Caesars invested an insane amount of money in the New York sports betting launch in terms of promotional, marketing and money spent on advertising.
Reeg said during the entity’s latest earnings call:
“We were more aggressive than we needed to be out of the box in New York.
“We got to our handle-share goals far earlier than we anticipated.”
Caesars expects to be EBITDA positive by 2023 NFL season
The massive promo spend led to Caesars posting a 44% market share from Jan. 10-16, No. 1 in NY.
But after the promo spend died down, Caesars dropped behind FanDuel and DraftKings. From April 18-24, Caesars NY had a 16% market share. Caesars started cutting back all of its media advertising spend from February through the rest of the year, which Reeg estimated at $250 million.
“We fully expect to inflect to EBITDA positive in digital as we move into football season in 2023.”
Caesars was also hurt in long-term NY customer retention, however, by confusion over bonuses, significant delays in withdrawals and spotty customer service. The entity told PlayNY previously that it was committed to improving in these facets.
Speaking broadly, Reeg said:
“Before next football season, we’re bolstering our customer service capability. We’re bolstering our technology. We’re most of bolstering our payments capability so that we’re ready for next football season.
Several NY pro teams are partners with Caesars
Caesars’ investments in NY include a sportsbook lounge that will open at Citi Field later this season. Caesars is a sportsbook partner of the Mets, Bills, Rangers, Knicks and Madison Square Garden.
Of Caesars’ overall digital strategy, Reeg said:
“We started this in August with very little recognition from the average customer that Caesars was associated with sports and sports betting. And certainly after the New York launch, there’s very few people that would be possible likely sports bettors looking for an app that didn’t know Caesars was a choice.”
