Caesars Sportsbook Halts Advertising Plan
Caesars' reported a $305 million adjusted for EBITDA loss on $116 million in net sales in the fourth quarter. Caesars promised to invest $1 billion in the Interactive sector only two quarters ago. However, it looks that everything was ramping up faster than intended. Caesars officials committed to "dramatically reduce" their sportsbook budget as the company strives to become profitable. However, CEO Tom Reeg assured shareholders that Caesars Sportsbook losses would peak in Q1 2022. Reeg said the company could not get out of certain March Madness TV advertising but that we would see many commercials mainly disappearing in the media.
Reeg said that since creating Caesars Sportsbook, the company has grown from an "afterthought in the market" to a cumulative market position of about 21%. However, given the increasing turnover rate of igaming consumers, some experts challenged the rationality of decreasing investment. They also insinuated that Caesars' current clientele might not remain loyal forever. Yet, since its inception, Caesars has acquired over 500,000 clients in New York, and the state is approximately the same size as the remainder of its US digital business merged. Reeg highlighted market interest for mobile sports betting in New York as "absolutely staggering," and claimed Caesars handled 75,000 client inquiries in the first 3 days of operation. Because Caesars has a larger-than-expected market share, the cost is more than the company had anticipated, with the Super Bowl, in particular, causing some hefty payouts. Looking ahead, Reeg anticipates further "small" Caesars Sportsbook debuts in Pennsylvania, Illinois, and Ontario in the second quarter of 2022. Additionally, Caesars may open the floodgates for debuts in Ohio and Maryland in the second part of the year. We will keep you updated on the latest Caesars news as soon as we hear it!