Caesars Interactive accelerates social gaming growth
Acquisition of Pacific Interactive and real-money sites in Nevada and New Jersey boost Q1 revenues by 82% compared to last year
A record year for social and mobile gaming helped Caesars Interactive Entertainment (CIE) post an 82% year-on-year increase in Q1 net revenues, cementing its position as the world’s number one social gaming operator.
Revenues in the three-month period grew to US$124.2m as February’s acquisition of Pacific Interactive provided an immediate boost to the number of players accessing Caesars’ mobile and social platforms.
Average Daily Users were up 10% from 5.2m to 5.7m compared the same period in 2013, while Average Revenue per User grew 71% to $0.24.
Caesars Interactive CEO Mitch Garber said the company intends to continue being “aggressively acquisitive in the social and mobile space” after acquiring four social gaming studios, including Playtika and Buffalo Studios, in as many years.
Revenues were also driven by the continued success of Caesars’ WSOP.com real-money poker platform in Nevada where it has claimed the lion’s share of the market, and its casino and poker sites in New Jersey which have around 30% market share, just behind leader the Borgata.
Adjusted EBITDA was up 42.9% to $33.4m for the period, with the success of its mobile and social products offsetting the continued marketing and advertising costs associated with its real-money sites in Nevada and New Jersey.
Garber said he expected marketing expenses to decrease without recurring one-time costs associated with launch, but that there was “still a lot of work to be done” to reach potential players in the New Jersey market.
“Certainly we are going to be able to decrease our marketing expense without having the launch expense associated on a going forward basis. But there is still a lot of work to be done to get all of the people in New Jersey who could be and should be customers to know this activity exists,” Garber said.
Caesars said it will focus on adding game content and new game features to its social and real money platforms, as well as increasing its distribution platforms, including the launch of a mobile application for its CaesarsCasino site in New Jersey.
Garber said he also remained confident that more states will look to legalise and regulated internet gaming now that Nevada and New Jersey are up and running.
“I am almost certain that we will see multiple states regulating online gaming, but it is a question of time and timing. I feel good about California, we feel pretty good about Pennsylvania, potentially New York, so lobbying efforts won’t subside,” he added.