Caesars readies US real-money launch as online growth slows in Q230th July 2013 8:38 am GMT
US casino operator Caesars Entertainment Corporation said Monday that it hopes to launch real-money online gaming operations in Nevada and New Jersey before the end of the year, as revenues attributable to its online gaming arm grew by 14 per cent during the second quarter of 2013.
Total net revenues fell marginally by 0.3 per cent to $2,158.2m during the quarter, with casino revenues dropping 8 per cent due to lower overall visitation to the company’s properties following increased competition in Atlantic City and other US regional markets outside of Las Vegas.
The decline in casino revenues was largely offset however by increases in non-gaming revenues, coupled with lower promotional allowances.
Q2 2013 Net Revenues
|US Dollars (US$)||Q2 2012||Q2 2013|
|Other (including CIE)||75.7m||86.4m|
Caesars Entertainment CEO and president Gary Loveman said: “While challenging conditions in the gaming industry impacted our gaming revenues during the second quarter, we are beginning to observe positive underlying trends resulting directly from the investments we've made to enhance our hospitality footprint, particularly in Las Vegas.”
Revenues attributable to the company’s online gaming arm, Caesars Interactive Entertainment (CIE), climbed 14 per cent year-on-year to $86.4m, primarily as a result of the acquisition of Buffalo Studios late last year.
The acquisition also increased the company’s second quarter expenses, although losses from operations fell by 26 per cent to $55.2m following impairment charges of $33.0m in the corresponding period last year that did not recur in 2013.
In a conference call following the release of the company’s financial results, Caesars said that the company remains committed to investing in its social and mobile gaming business, as well as pursuing real-money online gaming opportunities.
“CIE is preparing to launch real-money online poker in Nevada under the World Series of Poker brand, subject to remaining regulatory approvals,” said Loveman. “In New Jersey, we've submitted our application for an online gaming license and are working closely with state regulators. We hope to launch online gaming in New Jersey by the end of the year.”
During the quarter, the company further expanded its online offering through the acquisition of popular World Series of Poker social and mobile games from Electronic Arts.
“The acquisition gives CIE global rights and ownership of the title,” added Loveman. “The game is available on the Facebook platform, on the Amazon Kindle, Android devices and iOS.”
Overall, Caesars posted a 3 per cent increase in total operating expenses to $2,032.9m, with income from operations falling 34 per cent to $125.3m. Net loss for the quarter fell by 12 per cent year-on-year to $212.2m.
For the six month period, total net revenues fell by 2 per cent to $4,301.2m, with net loss down by 18 per cent to $430.1m.
“We reached a number of key milestones against our strategic initiatives in recent months, including breaking ground on Horseshoe Baltimore; setting a new attendance record at the World Series of Poker; beginning construction on our meetings facility in Atlantic City; and executing on our hospitality investments in Las Vegas,” continued Loveman.
“We are also making progress on our strategic transaction to form Caesars Acquisition Company and Caesars Growth Partners and have proactively improved our liquidity profile and balance sheet.
“We are excited about our prospects in 2014 and beyond, particularly in light of the improving economic conditions and consumer sentiment, favourable underlying business trends and projects that are scheduled to come online,” he added.
As at June 30th the company held cash and cash equivalents of $1,810.8m compared to $1,757.5m a year ago.
Shares in Caesars Entertainment Corporation (Co. Data) (NASDAQ:CZR) closed in New York Monday up 0.65 per cent at $15.58 per share.