- Caesars hits 1Q 2019 targets
- The corporation plans to expand in sports betting
- Comp points slashed for loyalty customers amid wage increase for staff
Caesars Entertainment Corporation’s 1Q 2019 Earnings Call came with an ambitious outlook. The company’s development strategy moving forward would feature expansion across sports betting. While the earnings call reflected the opinions of the corporation’s management, Caesars seems to have hit the mark it has assigned for itself.
Caesars Perform Well Q1, 2019 – Financial Highlights
Caesars struck a chord in terms of financial performance over the first three months of 2019. Adjusted EBITDAR soared to 8.5% year-over-year with fresh investment opportunities in sports betting presenting themselves.
Caesars now runs 17 sports books across the United States, and Nevada, New Jersey, Massachusetts and Pennsylvania in particular. The company is now eying Iowa as the next field for expansion with legislation still pending.
During the quarter, Caesars landed an important partnership with DraftKings which continues to be part of the corporation’s attempts to break into new revenue streams. While adopting DraftKings’ solutions, Caesars will continue to push forth with its own branded app.
There has been significant backing from the likes of NFL, Bleacher Report and a number of sports organizations.
Tribal Gaming Is No Thorny Issue for Caesars
Tribal operators have been disinclined to collaborate with private businesses encroaching on their territory, but in places like California, Caesars successfully introduced the Harrah’s Northern California located near Sacramento, CA in late April.
At a time when gamers and sports bettors are increasingly withdrawing to play remotely, Caesars’ Las Vegas properties managed to register +0.8% increase, a modest but important growth factor.
Caesars is facing stiffer competition in Atlantic City where the corporation owns three hotels, to name Harrah’s, Bally’s and Caesars. Commenting on the overall developments, Caesars CFO Eric Hession had the following to say:
“We’re finding good uptake online, and we’re finding that those online customers, when they sign up for sports betting, they’re also shifting to our other online products, so it’s a good acquisition tool For the property betting, we haven’t opened our permanent sports books yet, but we’re opening one on the boardwalk in the middle part of this year. And once that happens, we expect to see much larger increases in bets taken at the properties.”
Comp Points Cuts and Wage Increases
Caesars is also slashing the comp points awarded to loyalty customers which will help the company offset an $80-million wages increase for staff. Previously, Caesars announced plans to cut corporate jobs and save $40 million.
With the company balancing finances between its work force and future expansion, Caesars’ management remains bullish on Las Vegas while looking to more opportunities to expand and consolidate business in competitive markets.