Caesars touted significant increases in its iGaming and mobile sports betting sectors while stating a spin-off of its digital arm could be a possibility to drive more value to shareholders.
Spin to Win
A year-end earnings call proved enlightening as Caesars CEO Tom Reeg stated that driving value to shareholders was of paramount importance, and one byproduct of that strategy is considering all possibilities to achieve maximum monetization of its EBITDA-positive digital gaming segment.
“We recognize that a digital business trading at our blended brick-and-mortar multiple seven, eight times that, there’s dollars left on the table,” Reeg said. “… But it’s a natural time to start to think about should you be doing something else strategically that allows investors a path to investing in that business on a pure-play basis.
The strategy Reeg is referring to includes spinning off Caesars’ lucrative iGaming and mobile sports betting platforms into a publicly traded company, separate and distinct from the Caesars Entertainment. Shaking free of some of the more financially onerous sports betting sponsorship agreements that will expire will help with the bottom line, according to Reeg.
“We’re well on that path [to $500 million],” Reeg said. “The remaining piece at the end of 2025 will be the roll-off of some big partnership contracts in the beginning of 2026, and then I’d expect that we’d be at our targets. And recall those targets have not moved since those were just numbers on a spreadsheet almost four years ago at this point.”
Caesars’ digital EBITDA increased from $38 million in 2023 to $117 million in 2024, and the prospects of further growth are looming large this year.
Online Casino Growth
The standalone Caesars online casino app, launched in 2023, as well as the rollout of the Caesars Horseshoe brand, launched in October 2024, are the major contributors to the impressive growth of the company’s iGaming sector.
The company’s two standalone apps generated between 65% and 70% of its online casino business, and many of those new customers were not previous Caesars customers. This bodes well for future growth, as the increased handle coupled with a higher hold in 2024 is momentum that the company is building on going forward.
Caesars online casino numbers spiked by 40% in just one year, where the company revealed its iGaming handle had soared to $14.9 billion in 2024. The prospect of new states joining the seven that are currently offering iGaming would be a major boon to Caesars Digital and the industry at large.
More States, More Revenue
Currently, only New Jersey, Delaware, West Virginia, Pennsylvania, Michigan, Connecticut and Rhode Island have launched online casino gaming, unlike the 31 (including those seven iGaming states) that offer mobile sports betting, with Missouri poised to launch this year.
However, there have been more conversations and proposed iGaming bills discussed this year than ever before, and some will eventually join the iGaming community, which is good news for expanding Caesars’ online casino footprint.
“Somebody is saying they want more tax revenue from gaming; the way you’ve seen it evidence itself over time is expansion of gaming, which would be good for us,” Reeg said.
