This story is sponsored by WSOP
US casino giant Caesars has more than trebled the size of its interactive business through the acquisition of the company behind Facebook social casino Slotomania, it revealed this week.
According to the casino giant’s first quarter results, revenue from its Caesars Interactive Entertainment (CIE) division, headed by former PartyGaming boss Mitch Garber, were up 214% year-on-year to US$64.7m from US$20.6m in the comparable period last year, due mainly to the injection of revenue from the company’s Playtika subsidiary following its acquisition in May 2011 for an initial US$80m.
Caesars CEO Gary Loveman added the contribution of Caesars Interactive’s other online businesses had also been growing: “Our real money online gaming business continues to grow in the United Kingdom, Italy, and France and we remain confident as to the legalisation of online poker here in the United States.” Caesars runs WSOP-branded poker websites in the UK and France and Caesars-branded casino and bingo sites in the UK, on software platforms provided by 888, Barriere and Jackpotjoy owner Gamesys.
The net loss of the heavily indebted US casino group however nearly doubled to $280.6m in the quarter, with US$167m of this a non-cash impairment related to a cancelled casino project in Biloxi, Mississippi.
Loveman however was also far from glowing in his assessment of the returns from Playtika when pressed for more detail on the numbers generated by the Israeli social gaming business: “This reminds me of my adolescent romantic endeavours – an awful lot of effort with very little results. You can see from the Playtika numbers that are posted in the various marketplaces that how well the business is doing in terms of who is using it. That’s really all we are prepared to talk about at this point.”
According to recent data from consultancy Kontagent unveiled at the recent Global Igaming Summit in San Francisco, social casino games now account for 13% of all players on Facebook, up from 8% last year.
The Caesars boss also declined to split out the profit contribution of the online component overall - “[s]orry we are just not yet at a point where we wish to break out the online businesses’ activities” from the other things that are bundled in this omnibus category” - and to disclose exactly what share of CIE had been sold to the company’s Ohio land-based casino partner Rock Gaming for US$60.8m last month: “ We told what our partners paid but we have not told you exactly what they received for that. At the moment, that’s where we are going to leave it”, Loveman said.
Loveman, while expecting “a favourable result in New Jersey” this year in relation to a regulatory bill for online gambling being passed, he also suggested that Caesars actually being up and running in Nevada within this same time frame was far from guaranteed. “The Nevada legislation envisioned a federal bill, and in the event there is not a federal bill, I think there are one or two fixes the Nevada governor has to try and execute in the Nevada statute, before people can go online in Nevada alone. Nevada alone is not a big prize. We need some other states to come out way so that the pool of players we can serve will be large enough to be meaningful to us.”
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