• Caesars’ task in invigorating its iCasino is not a simple one.

• In +More data: iCasino and B&M differentials. 

• The big chill: January’s bad weather hits land-based casinos in the US.

• Cooling off: OSB market leaders pull back on promo spend – with one notable exception.

Always gonna be an uphill battle.

Caesars’ iCasino complications

Mountain to climb: The size of the task facing Caesars Entertainment in hoping to invigorate its iCasino operations in Michigan via the acquisition of the player database of WynnBet and catch the top three in the state is shown in the market research undertaken by Betting Hero.

• Not top of mind: While Caesars managed to pull together 21% total mentions when people were asked which iCasino brand came to mind, only 1% gave Caesars as the first mention. 

• This compares with 41% first mentions for FanDuel, 24% for DraftKings and 11% for BetMGM.

• The 21% total mentions figure in Michigan makes it the best state for Caesars. In two other iCasino states of New Jersey and Pennsylvania it totals 18% and 9% respectively.

The Betting Hero data for Michigan somewhat matches the pattern from the actual GGR data in the state. In January, BetMGM led with 27%, followed by FanDuel on 24%, DraftKings at 20% and then Caesars with 5.6%.

🤔 Caesars off the pace when it comes to first mentions

• A Wynn’s a Wynn: Caesars will be bolstered marginally by the acquisition of WynnBet in the state. According to the January GGR data, WynnBet achieved 1.8% iCasino GGR share in the month.

Gaining access: Caesars announced at the time of its Q4 earnings that it had bought WynnBet’s operations in Michigan, which it said was generating ~$3m in GGR a month. The company said the player base was towards the higher-end and slots-centric.

• As part of the deal, Caesars also took over and extended the market access deal with the Sault Ste. Marie Tribe of Chippewa Indians.

• This will give Caesars three more skins, at least one of which will be used to launch a new casino brand in Michigan.

• Without a casino property in the state to leverage, speculation has centered on the company likely utilizing its Harrah’s brand for the new iCasino.

Favoritism: More hopeful data for Caesars, perhaps, comes from the question put to consumers in Michigan by Betting Hero regarding which is their favorite iCasino app. Here, as can be seen, Caesars has managed to triple its responses, albeit from a low base, to 6% of respondents.

👍 But Caesars is gaming ground in the popularity contest

• Notably, FanDuel has improved its own position markedly YoY when it comes to favorite apps, with its main rivals DraftKings (down from 34% to 26%) and BetMGM (down to 11% from 215) each losing ground by this metric.

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+More by the numbers

Variable gears: E+M noted earlier this month the differential performance of iCasino over B&M gaming in January, with iCasino up nearly 20% while the weather-affected land-based variant was down 3.1%.

• It is worth looking at the performance of the two over the past year to gain a clearer picture of the trajectory of the two.

• As befits a resort casino town such as Atlantic City, the New Jersey B&M market is distinctly seasonal with its 2023 high coming in July when GGR hit $290m.

• In comparison, iCasino has less of a seasonal flavor, dipping in early summer but rising in every month of the second half.

By the numbers on social: Dustin Gouker does the math on a recent report claiming black market bets far outstripped legal bets on the Super Bowl and… the figures don’t work out.

Tickets are now available for the Earnings+More: Capital Markets Forum taking place at the New York Stock Exchange on the afternoon of Monday, May 6.

Consisting of six panels discussing various pivotal topics impacting the North American betting and gaming sector from corporate development to M&A and investor relations, the event features speakers from:

• Caesars, Moelis, PJT Partners, Blackstone, MGM Resorts, Macquarie, Duane Morris, Tekkorp, Citi, Truist, Discerning Capital, GMA, Innovation Capital, CBRE, Houlihan Lokey, Sharp Alpha, Bettor Capital and more.

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The big chill: January’s B&M declines

A touch of frost: Plummeting temperatures across the midwest and east coast and heavy rains in the south were accompanied by falling GGR across many major B&M gaming states in January, according to the data released to date.

 ❄️ Snow joke: B&M GGR in January falls in line with the temperature

Weather report: Regional casino operators were keen to get the message across that “severe winter weather,” in the words of Boyd Gaming CEO Keith Smith, was but a passing storm. “With these storms now passed, customer trends over the past two weeks have rebounded to fourth quarter levels, giving us optimism in the direction of this business,” Smith told analysts. 

• CFO John Hirsberg added that with the bad weather now passed, “it feels like the customers are not getting worse but, at this point, at least very stable.”

At Caesars, CEO Tom Reeg said January was a “debacle from a weather standpoint,” noting that across the market there were three or four weeks that were “significantly” weather-impacted. But even with the handicap, Reeg noted the company was likely to see growth across all its business segments in Q1.

• He added that the regionals business “remained firm.” ”We feel good about where we're headed.”

• While MGM Resorts has less of a regionals footprint, it also noted the inclement weather but suggested the customer base had brushed it off.

• “What we're seeing in February, we're pretty positive on,” said CFO Jonathan Halkyard. 

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OSB promos in January

Chasing losses: With the data from six states that disclose the amounts given away by operators as free bets now in for January, the differing strategies of the leading operators provides for some distinct compare-and-contrast analysis.

• Marketwide, promo spend in absolute dollar terms rose 40% YoY and was up 8% MoM. As a percentage of GGR, the figures were also up MoM by 3 ppts but were down 2 ppts YoY. 

Diff’rent strokes: There were clear differences in the operator-by-operator data. In absolute terms, ESPN Bet pulled back substantially on its MoM promo spend, down by 87% to a mere $3m, while FanDuel took the opposite route and appeared to revert to its previous stated policy of leaning into its own promotional activity when it sees a pullback elsewhere.

• In January, FanDuel upped its promotional spend in the six states by 5 ppts YoY and 16% MoM.

• It wasn’t followed by the competition. DraftKings cut promo spending YoY by 12 ppts and BetMGM stripped out 16 ppts.

However, as the team at Jefferies noted, FanDuel’s promo spend as a proportion of GGR remains the lowest among the major operators. “Put differently, while FanDuel spent the most in absolute dollar terms – indeed, double that of DraftKings – it was also the most promotionally efficient,” the team added. 

• Moreover, the generosity levels appeared to boost market share, up 7 ppts MoM to 55% compared to 1 ppt losses for both DraftKings and BetMGM and a 6 ppts decline for ESPN Bet.

Calendar

• Feb 27: Light & Wonder, Gaming and Leisure Properties (e)

• Feb 28: Gaming and Leisure Properties (call), Accel

• Feb 29: Codere Online, Golden Entertainment, Lottomatica, Melco

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