Caesars reports earnings drop despite confirming Wynn iGaming purchase

Article by : Charles Perrin Feb 22, 2024

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Caesars Entertainment is gearing up to further consolidate its presence in the vibrant Michigan iGaming market by acquiring Wynn’s digital rights.

While the financial terms pertaining to the deal weren’t disclosed, it comes off the back of a drop in earnings for Caesars in Q4.

During trading yesterday, Caesars reported a Q4 loss of 34 cents a share on revenue of $2.83 billion, and analysts had expected a loss of 11 cents on sales of $2.86 billion.

Same-store EBITDA (earnings before interest, taxes, depreciation, and amortization) was $19 lower than the year-earlier figure, but the debt reduction efforts should be lauded.

Anyway, the nature of the Wynn acquisition will see Caesars team up with the Sault Ste. Marie Tribe of Chippewa Indians. Previously Michigan’s iGaming partner, the tribe runs five land-based casinos.

Caesars, however, are no strangers to the Michigan iGaming space, and they already have two sites fully functioning in Caesars Casino and Caesars Palace Casino.

Nevertheless, the need to flood Michigan with more gaming options and brands is on the agenda.

Reacting to the purchase, Matt Sunderland, Caesars’ SVP & Chief iGaming Officer, said: “As we continue to grow our iGaming franchise, the assumption of WynnBet’s iGaming operations in Michigan allows us to tap into a significant market and customer base, providing a crucial step forward in growing our digital products and offering players more ways to play.

“We are honored to work with the Sault Ste. Marie Tribe of Chippewa Indians and look forward to growing with them.”

The deal comes just a week after Wynn announced it had sold its New York sports betting license to Penn Entertainment.

Wynn’s departure from the iGaming space has been rapid, and it will now only have retail sportsbooks in operation at its Las Vegas Strip casino hotels and Encore Boston Harbor.

Meanwhile, Austin Lowes, Chairman of Sault Ste. Marie Tribe of Chippewa Indians, hailed the acquisition of Wynn as a seismic moment.

He said: “It was paramount that our next partner in iGaming possessed both expertise in the US igaming market and a history of strong partnerships in Indian country.

“We believe we found that with Caesars and look forward to being part of their new iCasino offering.”

Although it is unclear what the Wynn price point is, Caesars has latched onto an opportunity, and it could deliver a great return on investment in the future.