Getting a leg-up on competition in the online casino industry is something every operator would like to do.
Caesars made a big play to do just that this week when it purchased WynnBet’s Michigan license.
With the purchase, Caesars intends to join the ranks of new online casinos in Michigan with an app that is unique and separate from Caesars Palace Michigan.
That will give it three different iGaming (online casino) options in Michigan:
- The legacy online casino accessible through the Caesars Sportsbook app.
- The standalone, more robust Caesars Palace online casino app.
- The WynnBet online casino, which will be rebranded by Casears sometime in 2024.
Let’s talk about #3 for a second. What will this new online casino look like, and what could it mean for Caesars’ business in Michigan?
Caesars planning new online casino brand
Caesars already has had a slight advantage in the Michigan online casino market over recent months.
Originally, its online casino was just as an option in Caesars Sportsbook Michigan. Yet, Caesars elected to launch Caesars Palace in August.
Caesars Palace is a standalone iGaming app that differs from what Caesars offered on its sportsbook. Despite just the one license with Grand Traverse Band of Ottawa and Chippewa Indians, Caesars has been able to maintain running both online casino options since August.
Now, by purchasing the license of WynnBet through the Sault Ste. Marie Tribe of Chippewa Indians, Caesars will have another option to work with.
To be clear, this is not increasing the number of legal online casino licenses in Michigan, which is still capped at 15. Caesars is currently allowed to offer both the online casino through its sports betting app and on its Caesars Palace app through one Michigan license. With the WynnBet deal, it has purchased a second license.
The WynnBet option will be part of a bigger rollout across multiple states where Caesars has access to multiple licenses.
However, the new option will be a different brand than Caesars Palace.
“Another exciting thing that we announced (Feb. 20) is the second branded product that we’ll be able to launch,” said President of Caesars Sports and Online Gaming Eric Hession, during Caesars Q4 investor call.
“Our expectation is that it’ll be a unique brand in all of the markets where we operate, and we’ll launch that towards the end of the year. It’ll provide an alternative for some of our customers to use, whether they prefer that brand over the Caesars Palace online or they just prefer to mix things up and go back and forth between the brands.”
The name of the new brand has yet to be announced but is expected to launch by the end of 2024.
Caesars gets over $87 million in 2023 online casino revenue
The added focus on Caesars growing its iGaming division has been seeing success in Michigan.
In 2023, the combination of Caesars Palace and Caesars Sportsbook produced $87.4 million in online casino revenue for the company. That was a 32.1% increase from 2022’s total of $66.2 million that it produced with just the casino option on Caesars Sportsbook.
What also was established is that Caesars peaked at the end of the year.
In November, it amassed $9.1 million in online casino revenue, which was a new record at the time.
That was followed by $9.6 million in December, another new record.
Then January came along and brought in $10.2 million to set another new standard. It also marked the first time Caesars crossed the $10 million threshold for monthly revenue.
“The core iCasino slot customer has responded positively to our significantly improved offering, and we’re pleased that the new product (Caesars Palace) and brand resonate much better with our Caesars Rewards database than our casino associated with the Sportsbook,” Hession said. “IGaming remains a critical component of our digital growth strategy for 2024 and beyond.”
WynnBet accounted for 2.7% of the 2023 online casino revenue share in Michigan. That equated to $52 million.
Should Caesars be able to bring that same revenue in, if not add to it, it puts Caesars in position to start closing in on Michigan’s big three online operators (BetMGM, FanDuel, DraftKings).
Why Caesars is going with a separate brand for the WynnBet purchase
Why is Caesars electing to use the WynnBet license for a completely new brand and not go with another Caesars Palace platform?
Hession believes variety is the best approach in this case.
“We liken it a lot to the Las Vegas Strip where a customer that comes to town, they’re going to stay at one property, but they’re going to visit multiple properties just because they want a different feel, they want a different experience, maybe to change their luck or whatever the reason is,” Hession said.
“We think that customers have that same behavior tendency online. We see that in New Jersey, where we run multiple brands today. A company like ours that has multiple well-known brands, we thought it’s only logical to have a second offering for those customers.”
Though the new online casino will have different branding, Caesars plans to use the same engineering behind the site to make the launch much more affordable.
“We don’t think there’ll be cannibalization between the two. In addition, we’ll be using the same platform and a lot of the same game content and integrations, so the cost to launch a second brand will be much lower than it costs to have a single brand in the market,” Hession said.
