Caesar aspires to achieve over $500 million in digital EBITDA by the year 2026, as digital growth continues to gather pace
In a remarkable show of growth, Caesars Entertainment's digital segment has outperformed expectations, setting a new quarterly record with an adjusted EBITDA of $80 million in Q2 2025. This impressive figure represents a doubling of the same metric year-over-year and is a significant step towards the company's goal of delivering over $500 million in digital EBITDA by 2026.
CEO Tom Reeg described the digital results as "fantastic" and expressed optimism about exceeding the $500 million target, citing the impact of the single wallet technology and the segment's strong momentum.
The digital segment's success can be attributed to several key factors. The implementation and rollout of a universal digital wallet system has improved user experience and retention, while proprietary content development, including in-house live gaming studios and new slot games, has enhanced product differentiation. A data-driven marketing approach, leveraging the Caesars Rewards database, has led to higher engagement, and improved sportsbetting hold rates and substantial growth in iGaming handle have also contributed to the segment's growth.
The digital segment's net revenues for the quarter were reported at $343 million, setting a new all-time quarterly record. The regional segment, however, faced $30 million in one-time headwinds, resulting in an adjusted EBITDA of $439 million.
The Las Vegas segment posted a same-store adjusted EBITDA of $469 million, with 97% occupancy, despite Reeg forecasting a soft summer in Vegas due to market demand. However, he also pointed to stabilization in forward bookings and a strong group calendar for Q4 2025 and into 2026.
Caesars Entertainment has also made strategic investments in its customer databases and technology enhancements, which remain central to its forward strategy. The company's focus on digital sustainability and competitive dynamics has been a focal point for analysts in recent quarters.
Reeg also highlighted anticipated free cash flow savings from tax changes, estimating $80 million to $100 million less in cash taxes in 2026 and 2027. There is also potential for a spinoff of the digital segment once the $500 million EBITDA run rate is achieved, possibly by the first half of 2026, to unlock shareholder value.
In summary, Caesars' digital segment is a critical driver of revenue diversification and long-term profitability, with a well-supported forecast of $500 million-plus EBITDA in 2026 based on current growth momentum and strategic initiatives. The company's focus on digital growth, coupled with strategic investments in customer databases and technology, positions it well for continued success in the digital gaming industry.
- Technology investments, such as the universal digital wallet system, have significantly improved user experience and retention in Caesars Entertainment's digital segment.
- In the digital gaming industry, Caesars Entertainment is leveraging technology enhancements and a data-driven marketing approach to enhance product differentiation and achieve higher engagement.
- A potential spinoff of Caesars Entertainment's digital segment, once the $500 million EBITDA run rate is achieved, indicates the company's commitment to technology-driven growth and unlocking shareholder value.
