Caesars Entertainment, Inc. (NASDAQ:CZR) Q4 2022 Earnings Call Transcript

David Bain : Great. First, I was hoping we can get a little bit more granular on the potential iCasino ramp in the back half. Just trying to get an idea of major tech improvements like sufficient slot content for churn when that kicks in, how important that is? Maybe any other major catalysts that move the needle in terms of share there because certainly doesn’t look like with the EBITDA guidance — and thank you for that by the way, it doesn’t seem like that includes a lot of big cash promotional push.

Eric Hession: Yes. Maybe I’ll jump in and take this one, David. So the big change that we’re going to make is to have a standalone casino app. So right now, if you want to play on the casino, you have to go download the sports betting app and then find the casino icon, click on it and go through the casino. We’ll also be offering a casino app that then you can do the same thing and go back to the sports betting side, but it will be much easier to use from a customer perspective who’s looking just for the casino side. We’ll also be creating some branded live table games in the various states more so than we have right now. We’ll also be introducing the ability to do segmented and triggered marketing. So much like if you recall, a year ago, we were unable to do that on the sports betting side.

We’re now able to do segmentation on the sports betting side, but we’re not on the casino side. And so we’re unable to use the learnings from the years’ and years’ experience we have on the brick-and-mortar side on the iCasino side. And so we’ll be having that come along as well. From a games content perspective, that’s something we can address now. And so what you’ll see is over the next say two to three months, we’ll be making steady releases, adding more games, particularly on the iOS side where we don’t have as many as on the Android side. So the game content will be coming along. We’ll be adding custom table games that are branded as Caesars, but the big changes will be the segmented marketing the ability to do triggered life cycle journeys and then the stand-alone app that you’ll see in the second half.

David Bain : Okay. Awesome. And then just kind of — I think this will bleed into Eric, your comments just now, but Tom, in the past, you’ve given us data points on land-based contributions from online, I believe, sometime last year around this time, it was $150 million of high-margin revenue. Could we get an update on how that’s trending now? And in terms of the omnichannel marketing approach, are there some specific plans you can share to sort of ramp that for more valuable customer acquisition and loyalty?

Tom Reeg : Yes, Dave. So I want to get out of updating that number. You should assume that it continues to grow. It’s our rewards database that we’re leaning on in this business more and more as time goes on. States open and every customer is up for grabs we’re in there. But as states mature, what you see us doing is leaning into our rewards database and bringing those new customers into our database and we’re seeing a lot of cross-market play. I get — anecdotally, I get a report of big winners and losers in both sports and iGaming every day. And a year ago, there was — the report will show their brick-and-mortar history, and this is particularly true in iCasino. You didn’t see a lot of correlation between big iGaming players and brick-and-mortar players.

And now you’re seeing — if it’s 25 people on the sheet every day, 20 of them have significant brick-and-mortar history. So you can see it continuing to build through the reward system, which is exactly what we were hoping would happen.

Operator: Our next question comes from Daniel Politzer with Wells Fargo.