Exhibit 10.4

May 21,
2004

Harry
C. Hagerty III
c/o Caesars Entertainment, Inc.
3930 Howard Hughes Parkway
Las Vegas, NV 89109



This
letter agreement ("Separation Agreement") confirms our understanding and agreement with respect to your separation from Caesars Entertainment, Inc. (formerly known as Park
Place Entertainment Corporation) ("CE" or the "Company"):

1.     Your
last day of employment and your authority to act as our representative will be effective as of May 12, 2004 ("Termination Date"). After the Termination Date,
you will cooperate with the Company as reasonably required until May 31, 2004 to assist in the transition of your duties.

2.     The
Company will: (1) pay your base salary until May 31, 2004; (2) reimburse you for any un-reimbursed business expenses in accordance
with Company policy; and (3) pay you a lump sum payment of $28,846.15, less usual payroll deductions, representing any unused vacation that has accrued as of your Termination Date.

3.     You
will receive the following payments and benefits if you execute this Separation Agreement and the General Release, which is attached as Schedule 1, and do not
revoke the General Release within the time period described therein:



---





Unless
otherwise provided in this Separation Agreement, the benefit plans, by COBRA or by other law, your right to participate in any of CE's benefit plans shall cease as of your
Termination Date. In addition, there shall not be further vesting of stock options or SRU's, but those vested as of the date of this Separation Agreement (which are set forth in the attached
Schedule 2) shall be governed exclusively by the terms of the applicable plans. You agree that this Separation Agreement provides you with valuable consideration in excess of that to which you
are otherwise entitled, and that you will not seek any further payments from CE other than benefits to which you were entitled prior to the Termination Date.

4.     You
covenant that you will fully comply with your obligations under your Judgment for Divorce Nisi and make any and all payments to your ex-spouse Lisa
Griffin Hagerty f/k/a/ Mary Elisabeth Hagerty required as a result of the payments and benefits provided to you herein.

5.     You
acknowledge and reaffirm that you are bound by: (a) subparagraph 6A(1) of your Employment Agreement for a period of six (6) months from the Termination
Date; (b) subparagraph 6A(2) and (3) of the Employment Agreement for a period of twelve (12) months from the Termination Date; and (c) subparagraph 6A(4) for a period of
five (5) years from the Termination Date.

6.     The
Company will issue a press release regarding your separation and will consult with you regarding the substance and content of the press release.

7.     This
Separation Agreement, the General Release, and Paragraphs 6, 9, 10, 11, 12, 13, 14, and 15 of the Employment Agreement (collectively referred to as the "Separation
Agreement and General Release") constitute the complete agreement between you and CE, and supersedes any and all oral or written agreements or representations, express or implied, with respect to the
subject matter of this Agreement. The Separation Agreement and General Release may only be modified or amended by a writing signed by you and Executive Vice President, Human Resources, West and
Midsouth of CE, or his designee.

8.     The
provisions of this Separation Agreement and General Release are severable, and if any one or more provisions may be determined to be illegal or otherwise enforceable,
in whole or in part, the remaining provisions, and any partially unenforceable provision to the extent enforceable, shall nevertheless be binding and enforceable.

---



9.     By
signing below, you indicate that you have carefully read and understood the terms of the Separation Agreement and General Release, and that you enter into the
Separation Agreement and General Release knowingly, voluntarily and of your own free will. You understand the terms and significance of the Separation Agreement and General Release, and intend to
abide by their provisions without exception.

|                                            |  | Very truly yours,                                                                      
|------------------------------------------- |  | ---------------------------------------------------------------------------------------
|                                            |  | /s/STEVEN F. BELLSteve Bell
Executive Vice President
Human Resources, West and Midsouth
|Agreed and Accepted:                        |  |                                                                                        
|/s/HARRY C. HAGERTY IIIHarry C. Hagerty III |  |                                                                                        
|May 25, 2004Date                            |  |                                                                                        
|                                            |  |                                                                                        
|WITNESSED:                                  |  |                                                                                        
|/s/STEVEN F. BELL                           |  |                                                                                        

STATE
OF NEVADA
COUNTY OF
CLARK                                        ss.

I
CERTIFY that on May 25, 2004, Harry C. Hagerty III personally came before me and acknowledged under oath, to my satisfaction, that he is named in and personally signed this
document; and signed, sealed and delivered this document as his act and deed.

| |  | /s/JUDITH K. SCHAFFERNotary Public
| |  | ----------------------------------

---



Schedule 2

Stock Options and SRUs Vested As Of The Termination Date

Harry Hagerty

Lisa Hagerty

Schedule 1

GENERAL RELEASE

1.     I,
Harry C. Hagerty III, for and in consideration of certain payments to be made and the benefits to be provided to me under Section 8 of my Employment Agreement
dated as of March 14, 2002 (the "Employment Agreement") with Park Place Entertainment Corporation (now known as Caesars Entertainment, Inc.) (the "Company"), and as specifically set
forth under the Separation Agreement, dated May 21, 2004 (the "Separation Agreement"), and conditioned upon such payments and provisions, do hereby REMISE, RELEASE, AND FOREVER DISCHARGE the
Company and each of its subsidiaries and affiliates, their officers, directors, shareholders, partners, employees and agents, their respective successors and assigns, heirs, executors and
administrators (hereinafter collectively included within the term the "Company"), acting in any capacity whatsoever, of and from any and all manner of actions and causes of actions, suits, debts,
claims and demands whatsoever in law or in equity, which I ever had, now have, or hereafter may have, or which my heirs, executors or administrators hereafter may have, by reason of any matter, cause
or thing whatsoever from the beginning of my employment with the Company to the effective date of this General Release, including matters arising from or relating in any way to my employment
relationship and the termination of my employment relationship with the Company, including but not limited to, any claims which have been asserted, could have been asserted, or could be asserted now
or in the future under any federal, state or local laws, including any claims under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §621et
seq., the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 2000eet seq., Title VII of the Civil Rights
Act of 1964, 42 U.S.C. § 2000et seq., the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A, the New Jersey Law Against
Discrimination, N.J.S.A. § 10:5-1et seq., the Nevada anti-discrimination statutes, N.R.S.
§§ 613.310-435, and the New Jersey Conscientious Employee Protection Act, N.J.S.A. § 34:19-1et
seq., any contracts between the Company and me and any common law claims now or hereafter recognized and all claims for counsel fees and costs; provided, however, that this
General Release shall not apply to any entitlements under the terms of the Separation Agreement or under any other plans or programs of the Company in which I participated and under which I have
accrued and become entitled to a benefit.

---



2.     Subject
to the limitations of paragraph 1 above, I expressly waive all rights afforded by any statute that expressly limits the effect of a release with respect to
unknown claims. I understand the significance of this release of unknown claims and the waiver of statutory protection against a release of unknown claims which provides as follows:



3.     I
hereby agree and recognize that my employment by the Company was permanently and irrevocably severed on May 12, 2004, and the Company has no obligation,
contractual or otherwise to me to hire, rehire or re-employ me in the future. I acknowledge that the terms of the Separation Agreement provide me with payments and benefits which are in
addition to any amounts to which I otherwise would have been entitled.

4.     I
hereby agree and acknowledge that the payments and benefits provided by the Company are to bring about an amicable resolution of my employment arrangements and are not
to be construed as an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by the Company and that this General Release is made voluntarily to provide
an amicable resolution of my employment relationship with the Company and the termination of my employment under the Employment Agreement.

5.     I
hereby certify that I have read the terms of this General Release, that I have been advised by the Company to discuss it with my attorney, and that I understand its
terms and effects. I acknowledge, further, that I am executing this General Release of my own volition with a full understanding of its terms and effects and with the intention of releasing all claims
recited herein in exchange for the consideration described in the Separation Agreement, which I acknowledge is adequate and satisfactory to me. None of the above-named parties, nor their agents,
representatives, or attorneys have made any representations to me concerning the terms or effects of this General Release other than those contained herein.

6.     I
hereby acknowledge that I have been informed that I have the right to consider this General Release for a period of 21 days prior to execution, although I may
sign it sooner if I desire. I also understand that I have the right to revoke this General Release for a period of seven days following execution by giving written notice to the Company at 3930 Howard
Hughes Parkway, Las Vegas, NV 89101, Attention: General Counsel. If I do not exercise this right during the seven-day revocation period, this General Release shall become effective on the
eighth day following execution. If I exercise this right during the seven-day revocation period, the Separation Agreement and this General Release shall be null and void.

Intending
to be legally bound hereby, I execute the foregoing General Release this 25th day of May, 2004.

|                         |  |                                            
|------------------------ |  | -------------------------------------------
|/s/STEVEN F. BELLWitness |  | /s/HARRY C. HAGERTY IIIHarry C. Hagerty III

STATE
OF NEVADA
COUNTY OF
CLARK                                        ss.

I
certify that on May 25, 2004, Harry C. Hagerty III personally came before me and acknowledged under oath, to my satisfaction, that he is named in and personally signed this
document; and signed, sealed and delivered this document as his act and deed.

|                                   |  | 
|---------------------------------- |  | 
|/s/JUDITH K. SCHAFFERNotary Public |  | 

---



QuickLinks