Carl Icahn’s bet on Caesars Entertainment already looks to be paying off. The activist investor has pushed for the Las Vegas-based casino operator to sell itself. On Monday, regional operator Eldorado Resorts announced an $8.6 billion cash-and-stock deal to acquire it.

Caesars’ stock has shot up this year, including another 15% Monday. Eldorado, meanwhile, is gambling that size will help combat big industry changes such as the legalization of sports betting. Eldorado’s shareholders are skeptical, but the fundamental reasoning...