Why Caesars' Could Spinoff Digital Company

Rumors are intensifying that Caesars Entertainment could split its iGaming division into a separate publicly traded company. These rumors aren't new—they've been around for nearly four years now—but they seem to be reaching a fever pitch lately.

The intensification could stem from Caesars Entertainment's ballooning debt and tanking stock. The company is believed to have nearly $35.8 billion in debt while Caesars stock (CZR) has fallen 34.5% over the last six months for a $27.10 USD price at the time of writing.

But what does splitting this side of the business do about anything?

Searching For Revenues

It's all about revenue. With that massive debt and falling stock price, investors are losing out on said investment into Caesars. By splitting the company's iGaming division into its own entity they can cash in on the growing online sports gaming industry.

Flutter Entertainment's stock (FLUT), FanDuel's parent company, has increased by 4.46% over the past six months while Draft Kings stock (DKNG) has held its value over the same period staying steady at around $39.

Deutsche Bank analyst Carlo Santarelli said a publicly offered Caesar's iGaming company could trade at slightly above $20.75 implying a worth of $4 billion. An IPO could offer a cash flow that could be funneled back to investors or service that massive $35 billion debt held by Caesars.

Split To Sell?

Some speculate that this split is the first step in Caesars selling their digital gaming company. That sounds like a far-fetched rumor.

While Caesars isn't one of the top two sportsbooks in the US, they are easily one of the most recognizable brands alongside FanDuel, DraftKings, and BetMGM. A sale could provide a massive one-time windfall but they'd forfeit millions in future revenues.

In 2024, Caesars reported $973 million in revenues from its digital brand. Why would they give that up now? Missouri is set to go live later in 2025, Oklahoma is going through a few options at the legislative level, and Texas is finally open to legalization. There's no reason for Caesars to sell their digital wing.