Caesars Expands Its Online Casino Footprint in Michigan

In an effort to expand its online footprint in Michigan, Caesars Entertainment has confirmed a two-pronged agreement to acquire WynnBET’s online gambling business in Michigan and grant a long-term extension of preexisting igaming market access rights with the Sault Ste. Marie Tribe of Chippewa Indians.

According to terms of the transaction, Caesars will gain access to the Sault Tribe’s online gaming “skins,” allowing the gaming giant to launch additional online gambling brands across the state. 

At the same time, existing WynnBET customers will transition to Caesars’ Michigan-licensed iGaming platform, pending regulatory approvals.

“Caesars is committed to a seamless transition and premium customer experience for current WynnBET iGaming customers,” the company said in a statement confirming the deal. “More information on Caesars’ new online casino offering will be announced at a later date.” 

Wynn Resorts, the parent company of WynnBET and Caesars will receive non-cash consideration, including extinguishment, reductions, and assignment of certain contractual obligations related to both parties’ businesses as part of the transaction.

Acquisition + Tribal Partnership = Online Casino Growth

In a statement Caesars Entertainment Senior Vice President and chief online gaming officer Matt Sunderland welcomed the deal.

“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,” Sunderland said. 

He added that Caesars was “honored” to work with the Sault Tribe, which currently owns and operates five land-based casinos located throughout the Upper Peninsula of Michigan.

“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,” said Austin Lowes, Chairman of the Sault Tribe. “We believe we found that with Caesars and look forward to being part of their new iCasino offering.”

Financial Turnaround for Caesars?

Caesars revealed its Q4 and full year 2023 financial results earlier this week, reporting full year net revenue of $11.5 billion, up 6% year-on-year from the $10.8 billion in 2022.

The firm confirmed a company net income $786 million compared to a net loss of $899 million for the comparable prior-year period. Company adjusted EBITDA rose to $3.9 billion, punctuated by a positive $38 million EBITDA reported by the firm’s digital division, up from a loss of $666 million in 2022.

At an individual divisional level, Caesars flagship Las Vegas casino properties reported revenue of $4.4 billion in 2023, up from $4.2 billion in 2022, while the firm’s regional land-based casino business saw 2023 revenue remain largely flat at $5.7 billion.

The biggest growth during 2023 was reported in Caesars Digital, which saw 77% year-on-year growth to $973 million from a prior 2022 high of $548 million. Caesars managed and branded division reported $307 million in 2023 revenue, jumping from the $282 million reported by the division over 2022.

At a Q4 level, Caesars reported total revenue of $2.83 billion, up slightly from the $2.82 billion reported during the same quarter in 2022. 

“Our fourth quarter operating results demonstrated consolidated net revenue growth, reduced net loss and stable consolidated Adjusted EBITDA year over year,” Caesars CEO Tom Reeg said. “Results were driven by a 28% year-over-year increase in Caesars Digital net revenue that generated a 10% Adjusted EBITDA margin in the quarter.” 

The company still lost $72 million in Q4. However, adjusted EBITDA reduced $19 million in Q4 2023 to $930 million, despite Caesars Digital reporting a positive $29 million in adjusted EBITDA over the same period.

“Full year results benefited from a 78% increase in Caesars Digital net revenues to approximately $1 billion, and an over $700 million improvement in this segment’s Adjusted EBITDA,” Reeg said.