Caesars Entertainment enjoyed a successful second quarter, but underperforming casinos like Horseshoe Baltimore were a cause for concern.
During an earnings call this week, Caesars reported consolidated net revenue of $2.8 billion and EBITDA of $1 billion during the second quarter, which ended in June.
But EBITDA (earnings before interest, taxes, depreciation, and amortization) from its retail casinos was down 8% year-over-year to $469 million.
Horseshoe contributed to that, as revenue declined nearly 13% compared to the second quarter of 2023.
Horseshoe Baltimore saw annual declines every month in Q2
Horseshoe is the only casino Caesars owns in Maryland, which has six retail casinos in operation. Attempts by lawmakers to legalize Maryland online casinos have been unsuccessful so far, but free online casino play is available through sweepstakes and social casinos.
In June, Horseshoe Baltimore collected $14.1 million in adjusted revenue, which ranked it third in Maryland. In the second quarter, the casino reported adjusted revenue of $43.5 million, which was more than $6 million less than Q2 in 2023 ($49.9 million).
Caesars CEO Thomas Reeg pointed to April as the main culprit in regional casinos’ slide.
“If you look at the decline in regional year-over-year, April was more than 100% of that. May and June both were up year-over-year.”
That was not the case at Horseshoe. The casino resort in Maryland’s largest city saw year-over-year declines during all three months of the second quarter. May was the worst month, when the casino reported $14.7 million in revenue, an 18% decline from $17.5 million in 2023.
Nonetheless, Reeg said he wasn’t worried by the poor performance of the company’s regional casinos.
“There’s nothing we’re doing in promotions, nor is there anything we see others doing that we need to respond to in that segment.”
Caesars’ online casinos perform well
The good news for Caesars in the second quarter was the performance of its online casinos. Net revenue totaled $276 million in Q2, up 28% year-over-year.
Adjusted EBITDA from its digital segment came out to $40 million. That was not only a record for the company, it was $29 million more than Q2 in 2023, said Caesars CFO Eric Hession.
“As we head to the back half of the year, we continue to be optimistic about the progress we’re making in both sports and iCasino, and I believe we are well set up for a strong finish to the year.”
Reeg said Caesars expects to launch Horseshoe, a new online casino app, in the third quarter.
“(We) feel very good about where digital is headed. Expect that the Horseshoe brand, the second brand in iCasino, can help us build on the gains that we’ve had since we rolled out Caesars Palace online. Momentum in digital is quite strong for us, and for all the targets that we’ve laid out in the past still seem well within our grasp.”
