Caesars Sportsbook Continues Rising-Profit, Lower-Handle Trend

Caesars is generating more revenue from sports betting even as bettors are wagering less, a dynamic executives say reflects a structural shift toward higher-margin, more efficient digital operations.

Key Takeaways

• Caesars grew digital revenue and EBITDA despite a decline in betting handle, driven by higher hold rates and improved player monetization.
• Executives emphasized a shift toward profitability, leveraging database-driven acquisition and higher-value customers over volume growth.
• The results reflect a broader industry trend prioritizing margins, with operators focusing less on handle and more on efficiency and product mix.

The company reported first-quarter digital net revenue of $374 million, up 11.6% year over year, despite a 3% decline in sports betting handle, according to its earnings report released Tuesday. Adjusted EBITDA for the segment rose 60.5% to $69 million, underscoring how improved hold rates and player monetization are offsetting softer wagering volume. 

Caesars Sportsbook’s hold rate was 8.3% in the first quarter of 2026, compared to 5.4% to end 2022. Company officials Tuesday reiterated a long-term hold projection of 10%. 

The result is a business generating more revenue per dollar wagered. Sports betting net revenue increased 9% in the quarter even as volume declined, driven not only by hold but also by higher-margin betting behavior, including increased parlay mix and cash-out activity. 

At the same time, Caesars is extracting more value from its existing user base rather than relying on aggressive customer acquisition. Average revenue per monthly unique player jumped 15% to $219 year-over-year as monthly unique players rose just 1% during that same time to about 512,000. 

This revenue growth combined with “efficient” customer acquisition spend has driven “solid flow through” to the company’s earnings, said Caesars Digital president Eric Hession during Tuesday’s call. 

CEO Tom Reeg framed the results as evidence that Caesars’ database-driven approach is insulating it from rising industry acquisition costs. He said the bulk of customer acquisition comes from the company’s Caesars Rewards database. 

“That’s a particular advantage now … we had a very strong quarter and we’re off to a good start in second quarter as well,” Reeg said. 

Reeg reaffirmed Tuesday that the company remains on track toward a long-term digital EBITDA target of $500 million, signaling confidence that the current margin expansion is sustainable – and those targets are achievable despite slowing handle growth. 

Sports betting industry shifts

The trend at Caesars mirrors a broader industry shift, as major U.S. sportsbooks prioritize profitability over handle growth after years – and hundreds of millions of dollars – in promotional spending. 

At DraftKings, recent earnings showed continued revenue growth alongside moderating handle expansion, as executives emphasized structural hold improvements and reduced promotional intensity. Similarly, FanDuel highlighted higher hold driven by parlay betting as a key driver of revenue outperformance relative to handle. 

Both national market share leaders are set to report Q1 earnings next month. 

BetMGM has also reported that revenue growth is increasingly tied to product mix and player value rather than pure betting volume, particularly as its iGaming segment expands. The No. 3 digital operator by revenue reflected these trends in its Q1 earnings as well. 

Taken together, the data suggests that handle is becoming a less relevant headline metric across the industry. Instead, operators are focusing on hold percentage, user monetization and cross-sell into iGaming to drive financial performance.

Caesars increased sports betting net revenue and AEBITDA despite a (3)% year-over-year decline in handle and only a 1% growth in monthly active players https://t.co/R1lGm0SrOx

— Ryan Butler (@ButlerBets) April 28, 2026

For Caesars, that shift is already translating into meaningful scale. The digital segment generated approximately $1.5 billion in trailing 12-month revenue and $262 million in adjusted EBITDA, up 69% year-over-year. 

All major sportsbook operators are also dealing with increasing competition from prediction markets. Though officials have maintained that sports event contracts are taking only a small percentage of their handle, the continued betting total slowdowns has reinvigorated concerns about prediction markets’ long-term impact on legal sportsbooks. 

Despite the competition, Reeg indicated that further margin expansion could come from both operational improvements and cost tailwinds, including the roll-off of marketing partnership expenses later this year. 

“Digital looks very strong,” Reeg said. “We’re still on the path that we laid out a long time ago.”

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