Caesars Leans on Digital Growth as Casino Revenues Dip

Caesars Entertainment reported a modest 2% year-over-year revenue increase in the first quarter of 2025, driven largely by the continued rise of its digital segment. The company posted $2.8 billion in group net revenue for the three months ending March 31, with gains in online operations offsetting weaker performance from its Las Vegas and regional properties.

Adjusted EBITDA rose 4% to $884 million, while Caesars ended the quarter with $884 million in cash and $12.3 billion in total debt—both figures slightly higher than the previous quarter.

Despite generating over $1 billion in net revenue from its Las Vegas properties, Caesars saw a 2% decline from the same period last year. Executives attributed the dip to an unfavorable year-over-year comparison, given that Las Vegas hosted the Super Bowl in Q1 of 2024. EBITDA from the city remained flat at $433 million.

Regional properties fared slightly better, with revenue up 1.7% to $1.38 billion and adjusted EBITDA rising 1.6% to $440 million. However, these gains were tempered by challenging weather patterns and the fallout from a terrorist attack in New Orleans on January 1, which killed 14 people and dampened business in the area.

The standout performer was Caesars Digital, which posted a 19% increase in net revenue to $335 million and a sharp rise in adjusted EBITDA—from $5 million to $43 million year-over-year. Division head Eric Hession credited “favourable player responses” to new content and platform updates.

 

Spin-Off Speculation Grows Around Digital Business

The strong digital showing has reignited speculation around a possible spin-off. Two new directors—both from Carl Icahn’s Icahn Enterprises—joined Caesars’ board in March, prompting discussion about strategic restructuring. Icahn, who played a pivotal role in Caesars’ 2020 merger with Eldorado Resorts, has recently increased his stake in the company.

In a statement, Icahn expressed interest in “exploring strategic alternatives” for Caesars’ digital arm. CEO Tom Reeg responded by emphasizing the company's focus on meeting financial targets first but signaled openness to value-enhancing moves. “We will look at any and all options to create value for shareholders,” Reeg said during Tuesday’s earnings call.

Caesars Digital is now active in 32 North American jurisdictions.

Reeg and other executives acknowledged growing macroeconomic concerns, including market volatility and recession fears. While Caesars downplayed the risk of consumer softness, the company pointed to its cost-efficiency experience during the pandemic and its now-robust digital operations as buffers against future downturns.

Reeg also addressed recent state-level efforts to raise taxes on online gambling—a trend he attributed to dwindling Covid-era federal funding. While lamenting the financial pressure on operators, he noted that fiscal strain could accelerate legalization in untapped markets.

Stock repurchases were also discussed, with Reeg stating Caesars would act “opportunistically,” especially during periods of market dislocation. Shares briefly dropped to $23 in April following new U.S. tariffs but have since rebounded into the high $20s.

 

Minimal Impact from Prediction Markets, Legalisation Outlook Mixed

The CEO commented on the emerging but contentious sector of sports-related prediction markets, stating that Caesars has experienced “zero impact” from platforms like Kalshi. A planned regulatory hearing by the Commodity Futures Trading Commission was recently canceled, adding uncertainty to the space.

Looking ahead, Reeg suggested that 2025 may be a quiet year for new sports betting or iGaming market openings after failed efforts in Nebraska and Hawaii. However, he remained optimistic that fiscal pressures could drive renewed momentum for legalization initiatives.

 

We will look at any and all options to create value for shareholders.

 

Conclusion

Caesars Entertainment's Q1 report underscores the company’s shifting dynamics: a stable but plateauing physical casino business and a rapidly growing digital segment. As analysts and investors debate the future structure of Caesars’ operations, the digital division continues to emerge as both a financial engine and a possible path to reshaping the company’s market position. Whether through a spin-off or internal expansion, Caesars appears poised to lean further into its online success in a volatile but opportunity-rich gaming landscape.