Caesars’ CEO Tom Reeg expressed optimism regarding his company’s ability to convert its massive database of Caesars Rewards customers, who normally gamble at its land-based properties, into online sports bettors and iGaming patrons.
While many seasoned players have historically relied on trusted offshore betting sites for their digital wagering needs, Reeg believes the brand’s loyalty program will be a key driver in bringing those customers into the company’s own online ecosystem.
Carpe Diem
Caesars still sees a golden opportunity to turn its in-person casino visitors into online bettors, according to CEO Tom Reeg. Speaking during the company’s first-quarter earnings call on Tuesday, he acknowledged that some of those customers have drifted to competitors and need to be won back.
“We continue to get better, but there’s still a gigantic opportunity in converting customers in our database that are primarily brick and mortar with us and play digitally elsewhere and bringing them into the fold,” Reeg said. “When we first launched our app on the sports side and, frankly, on the iCasino side before Caesars Palace Online, the experience lagged our peers. That’s no longer the case. So, it’s going to those customers to get another look.”
The company has a major advantage in its Caesars Rewards program, which includes well over 65 million members—the largest customer database in the industry.
In the first quarter, Caesars’ digital division reported about 512,000 monthly active users, a 2% increase compared to last year. Adjusted EBITDA rose sharply by 60.5% to $69 million, and the company remains on pace to reach at least $500 million in annual EBITDA from its online operations.
Leveraging Its Database
While competitors like BetMGM have pointed to rising customer acquisition costs—especially with added competition from prediction markets—Caesars says it hasn’t faced the same pressure. Its large existing customer base helps keep marketing expenses more manageable.
“I know others have pointed to prediction markets as an impact on customer acquisition costs,” Reeg said. “Recall that the bulk of our customer acquisition comes from our Caesars Rewards database. That’s a particular advantage now. We’re not swimming in those same pools where prediction markets are making acquisition costs higher.”
Reeg also noted that customers who engage with Caesars online tend to spend more when they visit physical casinos. To build on that connection, the company plans to offer its Las Vegas visitors clearer information about how Caesars Rewards benefits can be used, including within its digital platforms.
Digital net revenue increased by 15% in the first quarter. Although that’s below the roughly 20% growth rate Caesars Digital President Eric Hession has said is achievable, he emphasized that hitting EBITDA targets doesn’t depend on reaching that higher growth mark.
Online casino betting volume climbed 20% to $5.4 billion, while sports betting volume dipped 3 percent. However, the sports betting hold improved to 8.3%, up one percentage point from a year ago, as the company works toward a long-term goal of 10%.
Looking Ahead to Alberta
The company is preparing for the launch of online casinos and sports betting in Alberta on July 13th, and Caesars will take a more robust approach than it did in Ontario.
Although Alberta’s population is smaller—just over 5 million compared to Ontario’s 16.1 million—it has relatively high average wealth per resident. Caesars plans to roll out all three of its platforms in the province, including its standalone casino brands Caesars Palace and Horseshoe. As the market expands, ensuring players have access to proper gambling help and resources remains a priority for the industry to maintain a safe betting environment.
