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Caesars Entertainment, the renowned casino and hospitality company, has seen a dramatic shift in its business landscape, with its digital division outperforming its traditional business units significantly. However, despite speculation and growth, there has been no official confirmation that Caesars Entertainment will spin off its digital division in 2026.
In the first half of 2025, Caesars' digital segment broke records in both revenue and profitability, contributing $123 million in adjusted EBITDA, a staggering 173% increase from the same period the previous year. This growth has been attributed to the company's success in online gaming and sportsbook segments, reflecting broader industry trends.
CEO Tom Reeg has suggested that the earnings from the digital division could "substantially" exceed $500 million within a few years, a figure that now appears within reach for Caesars Entertainment. If this goal is met in 2026, a spin-off may no longer be hypothetical.
Caesars' traditional assets, on the other hand, have underperformed, with earnings in Las Vegas and regional markets described as "soft". Despite this, CEO Reeg has suggested that the worst may be over for these underperforming assets, stating that downward trends from the spring have since stabilized.
The momentum in Caesars' digital segment is extraordinary, both from a volume and an EBITDA perspective. This growth has not gone unnoticed, with Icahn viewing the digital unit as undervalued. However, no public push from Icahn, who increased his stake in the company and placed two allies on the board, has been made regarding the digital unit.
Reeg acknowledged that the company is laying groundwork internally for a potential spin-off. This comes after Caesars Entertainment set a target of $500 million in annual digital EBITDA by 2026 in 2021.
It's important to note that, while there are indications of a potential spin-off, no official confirmation or concrete plans for a spin-off in 2026 have been announced. For the most accurate and recent updates on this topic, it's recommended to monitor official Caesars Entertainment investor communications, press releases, or reliable financial news sources for any announcements closer to or during 2025 and 2026.
External risks, such as international resistance to U.S. tariffs and growing economic pressure on consumers, could affect travel and discretionary spending into late 2025. This could potentially impact Caesars Entertainment's overall performance, but for now, the focus remains on the extraordinary growth of its digital division.
Recent developments in the industry include Boyd Gaming's decision to sell its stake in FanDuel, and Wynn Resorts' shutdown of its digital operations in 2023. As Caesars Entertainment continues to outperform competitors in iGaming growth and increasing its sports betting handle year-on-year, it will be interesting to see how the company's digital division evolves in the coming years.
Caesars Entertainment's digital division, which includes online casino, sports betting, and poker segments, recorded a massive 173% increase in adjusted EBITDA in the first half of 2025, contributing $123 million, and is on track to "substantially" exceed $500 million according to CEO Tom Reeg. The growth in digital segments could potentially lead to a spin-off if the target is met in 2026, as the company lays groundwork internally for this possibility.
