Sportsbooks Thrive Despite Odds: Caesars' Earnings Surge

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Transcript

00:00all right finally sam let's close it out i know the year and sports betting went on the side of

00:04the books we don't love to say that but that's the reality of the situation so i'm gonna guess

00:10that uh i'm sorry the public public excuse me totally backwards there the public ended up

00:15winning all the money not so unusual that yeah it's so unusual yeah usually the sports books are

00:20built or building another hotel these days uh so let me recant the football season went in favor

00:26the public march madness went in favor of the public so when caesars put their numbers out

00:32how did they look yeah everyone was expecting another bad quarter and that was kind of the

00:37vibes around the investment community uh march madness all the favorites won nfl historically

00:43bad but caesars actually did pretty well they just reported their uh second or their first quarter

00:48earnings yesterday and they pulled in 43 million dollars of profit in their digital segment uh

00:54compared to just five million in the same quarter last year so that's almost five times as much

00:59despite the awful quarter of march badness um so the obvious question is how did they do that uh it

01:05seems that they as well as other companies kind of knew that they had to do something to fight this

01:13unlucky streak and uh stop investors from being spooked about what they usually call one-time headwinds

01:18that kept happening and you know the answer is always craig you know you drive people to more

01:22parlays these higher margin bets which people love to bet um parlays as a percentage of all bets were

01:28up about three percent from last year uh which you know goes into everything caesars has done with the

01:33promos and you see that every sports book now there's no longer you know the free bets on a single

01:38bet are very minimal compared to parlays um so that helped drives uh hold up from 6.7 percent to about

01:467.5 percent that's the win margin that the sports book takes and even though uh betting volume was

01:51actually down a little bit uh year over year kind of shows that caesars you know they they figured out

01:57a way to make more out of less and i think the investment community is going to be really

02:01encouraged and uh i wouldn't be surprised if we didn't see similar results uh for draft kings and

02:06fan duel bet mgm and everyone else when they report their earnings but again kind of a surprise after

02:11the very very chalky march badness and an encouraging sign for the sports books especially caesars which

02:17is actually doing pretty well right now in their digital segment when we expected everything to

02:21be a disaster so it's a fascinating one