CZR 10-K & 10-Q changes, risk factors and insider trading

Our brick-and-mortar operations face increasing competition as a result of the expansion of legalized online gaming and betting, including our own online betting and gaming operations, in a number of the jurisdictions in which we operate. Additionally, we face new competition from sports event trading as derivativesderivative products in prediction markets regulated by the Commodity Futures Trading Commission. This new competition purports to be available nationwide and is currently being offered by a growing number of providers. While we believe that we are well positioned to compete with new entrants to the betting and gaming market through our online betting and gaming offerings, the competitive dynamic is evolving and we cannot assure you that our results of operations will not be adversely impacted by the expansion of legalized online gaming and betting.

States that already have legalized casino gaming may further expand gaming, and other states that have not yet legalized gaming such as Texas,gaming, may do so in the future. We also compete with Native American gaming operations in California and other jurisdictions where Native American tribes operate large-scale gaming facilities or otherwise conduct gaming activities on Native American lands, which we expect will continue to expand. Further expansion of legalized casino gaming in jurisdictions in or near our markets or changes to gaming laws in states in which we have operations and in states near our operations could increase competition and could adversely affect our operations.

Our fixed-odds betting products involve betting where winnings are paid on the basis of the amounts wagered and the odds quoted. Odds are determined with the objective of providing an average return to the bookmaker over a large number of events. However, there can be significant variation in gross win percentage event-by-event and day-by-day. We have systems and controls that seek to reduce the risk of daily losses occurring on a gross-win basis, but there can be no assurance that these will be effective in reducing our exposure to this risk. As a resultresult, we may experience (and we have from time to time experienced) significant losses with respect to individual events or betting outcomes, in particular if large individual bets are placed on an event or betting outcome or series of events or betting outcomes. Any significant losses on a gross-win basis could have a material adverse effect on our business, financial condition and results of operations.

In addition, if any of our third-party servicesservice providers terminates its relationship with us, is unable to maintain necessary regulatory approvals, or refuses to renew its agreement with us on commercially reasonable terms, we would have to find alternate service providers. We cannot be certain that we would be able to secure favorable terms from alternative service providers that are critical to the operation of our business or enter into alternative arrangements in a timely manner. Our digital business, results of operations and prospects would be adversely impacted by our inability or delay in securing replacement services that are sufficient to support our online business or are on comparable terms.

Our business may fluctuate due to seasonality and other factors. Our casino business is impacted by weather conditions that may deter or prevent customers from reaching the facilities or undertaking trips, which would particularly affect customers who are traveling longer distances to visit our properties. Our casino business can also fluctuate due to specific holidays or other significant events, (particularly when the holiday falls in a different quarter than the prior year,year) or other significant events, the World Series of Poker tournament (with respect to our Las Vegas properties), city-wide conventions, a large sporting event or concert, or visits by our premium players. Our sportsbook business may also be impacted by availability or scheduling of major sporting events or the cancellation or postponement of sporting events or races, including lockouts, strikes or similar disruptions. Seasonality, holiday, or other significant events may affect our digital operations, properties or regions differently. These factors, among other things, could adversely affect our business, financial condition, and operating results, cause volatility in the trading price of our stock and impact our cash flow from quarter to quarter.

We are a large consumer of electricity, water and other energy and utility services and, therefore, higher prices may have an adverse effect on our results of operations. Accordingly, increases in water, energy and other utility costs may have a negative impact on our operating results. Additionally, higher electricity and gasoline prices that affect our customers may result in reduced visitation to our resorts and a reduction in our revenues. Further, our operations or the operations of our critical suppliers could be negatively impacted by the duration of drought conditions, or other cause of water stress or shortages, such as those experienced in recent years in the southwest United States, or other areas in which we operate. We may be indirectly impacted by regulatory requirements aimed at reducing the impacts of climate change directed at up-stream utility providers, and we could experience potentially higher utility, fuel, water and transportation costs.

CompromisesWe are vulnerable to compromises of our information systems orand unauthorized access to confidential information or our customers’ personal information which could materially harm our reputation and business.

We assess and monitor the security of our IT systems as well as the collection, storage, and transmission of customer information on an ongoing basis, including utilizing commercially available software and technologies to monitor, assess and secure our network. Further, some of the systems currently used for transmission and approval of payment card transactions and the technology utilized in payment cards themselves, all of which can put payment card data at risk, are determined and controlled by the payment card industry, and other such systems are determined and controlled by us. Although we had taken steps designed to safeguard our customers’ confidential personal information and important internal company data, on September 14, 2023, we announced that we identified suspicious activity in our information technology network resulting from a social engineering attack on one of our outsourced IT support vendors and that we determined that the unauthorized actor acquired a copy of, among other data, our loyalty program database, which includes driver’s license numbers and/or social security numbers for a significant number of members in the database (the “Data Incident”). We took steps to ensure that the stolen data was deleted by the unauthorized actor, implemented corrective measures, and continue to work with industry-leading third-party IT advisors to harden our systems and protect against future attacks. We also took steps to require that the specific outsourced IT support vendor involved in the matter implement corrective measures to protect against further attacks that could have posed a threat to our systems. While we took these actions, we cannot assure that the stolen data was deleted by the unauthorized actor or that our network and other systems and those of third parties, such as service providers, will not be compromised, damaged, or disrupted by a third-party breach of our system security or that of a third-party provider or as a result of purposeful or accidental actions of third parties, our employees, or those employees of a third party, power outages, computer viruses, system failures, natural disasters, or other catastrophic events in the future. Our third-party information system service providers face risks relating to cybersecurity similar to ours, and we do not directly control any of such parties’ information security operations. As an example, the Data Incident arose from a social engineering attack on one of our outsourced IT vendors resulting in our customer information and other data being accessed by an unauthorized actor. Advances in computer and software capabilities, encryption technology, new tools,tools used by threat actors (including artificial intelligence), and other developments maysubstantially increase the risk of asuccessful cyberattacks and security breaches in the future securitythat breach.can Anycause futureoperational securitydisruption breach,(e.g., mayransomware), alsocompromises result into customer information or other proprietary data beingand accessedother or transmitted by or to a third party.losses. Despite the measures we have implemented to safeguard our information, including actions taken following the Data Incident, there can be no assurance that we are adequately protecting our or our third-party service providers’ systems or information.

AnyA future datacyberattack securityor breachesincident givingthat risecauses tomaterial aoperational disruption or material loss, disclosure of, misappropriation of, or access to customers’ or other proprietary information or other breach of our information security could result in additionalsignificant legal claims or legal proceedings, including regulatory investigations and actions, or liability for failure to comply with privacy and information security laws, including for failure to protect personal information or for misusing personal information could damage our reputation, and expose us to additionalfines, penalties and injunctive relief, as well as claims from customers, financial institutions, regulators, payment card associations, employees, and other persons, any of which could have an adverse effect on our financial condition, results of operations, and cash flow. Any such damages and claims arising from a future breach may not be completely covered or may exceed the amount of any insurance available.

Our technology infrastructure is critical to the performance of our digital betting and gaming operations and to user satisfaction and we rely significantly on our computer systems and software to receive and properly process internal and external data, including data related to Caesars Rewards. We devote significant resources to our technology infrastructure, but our systems may not be adequate to avoid performance delays or outages that could be harmful to our online business. In addition, while we believe we have taken appropriate steps, working with industry-leading third-party IT advisors, to harden our systems following the Data Incident and implement corrective measures to protect against future attacks that could pose a threat to our systems, we cannot assure you that such measures or any additional measures we take to prevent cyber-attacks and protect our systems, data and user information and to prevent outages, data or information loss, fraud and to prevent or detect security breaches will be sufficient to ensure uninterrupted operation of our digital platform and provide absolute security. We have experienced, and weare maylikely in the future to experience, website disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints.constraints, as well as cyberattacks. Disruptions from unauthorized access to, fraudulent manipulation of, or tampering with our computer systems and technological infrastructure, or those of third parties that provide support to our operations, could result in a wide range of negative outcomes, each of which could materially adversely affect the operation of our online business and our financial condition, results of operations and prospects.

Additionally, our computer systems and software may fail or may contain errors, bugs, flaws or corrupted data, and these defects may only become apparent after the launch of our online products. These types of issues could disrupt our operations or render a product unavailable when users attempt to access it or cause access to our offerings to be slower than our users expect. Inaccessibility or slow access to our products could make users less likely to return to our digital platform as often, if at all, or to recommend our offerings to other potential users, which could harm our brand perception, cause our users to stop utilizing our online offerings, divert our resources and delay market acceptance of our online offerings. We also deploy scanning tools in our IT environment that allow us to regularly identify and track known security vulnerabilities but we cannot guarantee that patches or mitigating measures will be applied before vulnerabilities can be exploited by a threat actor.

A substantial portion of the infrastructure that is required to enable users to access our digital betting and gaming offerings is provided by third parties, including Internet service providers and other technology-based service providers. In particular, we currently host our online betting and gaming offerings and support our operations using Amazon Web Services (“AWS”) and other third-party technology, platforms and services. Our third-party providers may experience service interruptions, delays, outages or damage, including due to capacity constraints, an event causing an unusually high volume of Internet use (such as a pandemic or public health emergency), infrastructure changes or upgrades (such as 5G or 6G services), human or software errors, website hosting disruptions, natural disasters, cybersecurity attacks, terrorist attacks, power outages and similar events or acts of misconduct. We exercise little control over our third-party providers and any difficulties that these providers experience, including the potential of certain network traffic receiving priority over other traffic (i.e., lack of net neutrality), and any future cyberattacks that disrupt our providers’ operations and services, which may adversely affect our business. Because our ability to provide our users with continuing and uninterrupted access to our platform is critical to the success of our digital business, we prioritize our efforts to ensure that our facilities and infrastructure and the facilities and infrastructure of our third-party providers support our current and expected operations and are designed to mitigate the impacts of system malfunctions. Nevertheless, there can be no guarantee that such systems will be able to meet the demand of our current and future digital business, the overall online betting and gaming industry and the growth of the Internet.Internet, or that such systems are adequately protected from cyberattacks and other security incidents. Furthermore, if we do not maintain business relationships with our third-party providers, and in particular, AWS, we may not be able to secure required third-party services on terms that are acceptable to us or on an acceptable time frame. Any of these risks could result in a loss of revenue and cause us to incur unexpected costs that could be significant, which could have a material adverse effect on our online business, financial condition, results of operations and prospects.

Our future success will depend upon, among other things, our ability to keep our senior executives and highly qualified employees. The operation of our business requires qualified executives, managers and skilled employees with gaming and horse racing industry experience and qualifications who are able to obtain the requisite licenses and approval from the applicable gaming authorities. We compete with other potential employers for employees, and we may not succeed in hiring or retaining the executives and other employees that we need. A sudden loss of or inability to replace key employees could have a material adverse effect on our business, financial condition and results of operations. Moreover, there has from time to time been a shortage of skilled labor in our markets and the continued expansion of gaming near our facilities, including the expansion of Native American gaming and internet betting and gaming, may make it more difficult for us to attract qualified candidates. While we believe that we will continue to be able to attract and retain qualified employees, shortages of skilled labor will make it increasingly difficult and expensive to attract and retain the services of a satisfactory number of qualified employees, and we may incur higher costs than expected as a result.

From time to time, we have also experienced attempts by labor organizations to organize certain of our non-union employees, which hashave achieved some past success. We cannot provide any assurance that we will not experience additional and successful unionunionization activityattempts in the future. The impact of this union activity is undetermined and could negatively impact our results of operations.

We and our subsidiaries may be able to incur substantial additional indebtedness, including additional secured indebtedness, and may enter into financing obligations similar to our leases with VICI and GLPI in the future. As of December 31, 2024,2025, we had $2.1$1.9 billion of borrowing capacity under our CEI Revolving Credit Facility and the Caesars Virginia Revolving Credit Facility, after consideration of $84$83 million in outstanding letters of credit and $46 million committed for regulatory purposes, the outstanding amount on the CEI Revolving Credit Facility, and $40 million of other reserves which is only available for certain permitted uses. Further, our existing debt agreements currently permit, and we expect that agreements governing debt that we incur in the future will permit, us to incur certain other additional secured and unsecured debt. Further, we may incur other liabilities that do not constitute indebtedness. The risks that we face based on our outstanding indebtedness may intensify if we incur additional indebtedness or financing obligations in the future.

We also refer to (i) our Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Balance Sheets as our “Balance Sheets,” (iii) our Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) as our “Statements of Operations,” (iii) our Consolidated Balance Sheets as our “Balance Sheets,” and (iv) our Consolidated Statements of Cash Flows as our “Statements of Cash Flows.” References to numbered “Notes” refer to Notes to our Consolidated Financial Statements included in Item 8.

We currently own, lease or manage an aggregate of 5352 domestic properties in 18 states with approximately 51,400 slot machines, video lottery terminals and e-tables, approximately 2,8002,700 table games and approximately 45,600 hotel rooms as of December 31, 2024.2025. In addition, we have other properties in North America that are authorized to use the brands and marks of Caesars Entertainment, Inc. Our primary source of revenue is generated by our gaming operations, which includes our casino properties, retail and online sports betting and online gaming. Additionally, we utilize our hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to our properties.

We periodically divest assets to raise capital or, in previous cases, to comply with conditions, terms, obligations or restrictions imposed by antitrust, gaming and other regulatory entities. The following is a summary of divestitures completed duringas the years endedof December 31, 2024, 2023 and 20222025:

In addition to the divestitures above, the operations of Rio All-Suite Hotel & Casino (“Rio”) were assumed by the lessor on October 2, 2023, and we exited our management agreement with Caesars Dubai on November 16, 2023. See Item 8. Financial Statements and Supplementary Data — Note 3 for further discussion on these key transactions and any applicable gain (loss) or impairment charges recorded.

During the yearyears ended December 31, 2023,2025 we recorded income related to the investment of $64 million, primarily due to the joint venture’s gain on the sale of land. During the year ended December 31,and 2024, we received distributions of $39$23 million and $39 million, respectively, and recorded $19 million and $11 million of income related to our investment due to the joint venture’s gaingains on the salesales of acertain land parcel.parcels, respectively. As of December 31, 20242025 and 2023,2024, our investment in the joint venture wastotaled $119$115 million and $147$119 million, respectively, and is recorded in Investment in and advances to unconsolidated affiliates on the Balance Sheets.respectively.

Our primary source of revenue is generated by our gaming operations, which includes our casino properties, retail and online sports betting and online gaming. Additionally, we utilize our hotels, restaurants, bars, entertainment venues, retail shops, racing and other services to attract customers to our properties. Our operating results are highly dependent on the volume and quality of customers staying at, or visiting, our properties and using our sports betting, horse racing and iGaming applications.

Key performance metrics include volume indicators such as drop or handle, which refer to amounts wagered by our customers. The amount of volume we retain, which is not fully controllable by us, is recognized as casino revenues and is referred to as our win or hold. Slot win percentage is typically in the range of approximately 9% to 11% of slot handle for both the Las Vegas and Regional segments.handle. Table games hold percentage is typically in the range of approximately 16% to 23% of table games drop in both the Las Vegas and Regional segments.drop. Sports betting hold is typically in the range of 7% to 11% and iGaming hold typically ranges from 3% to 5%. In addition, hotel occupancy, which is the average percentage of available hotel rooms occupied during a period, is a key indicator for our hotel business in the Las Vegas segment. See “Results of Operations” section below. Complimentary and discounted rooms are treated as occupied rooms in our calculation of hotel occupancy. The key metrics we utilize to measure our profitability and performance are Adjusted EBITDA and Adjusted EBITDA margin. See “Results of Operations” section below.

(a)Corporate and Other includes revenues related to certain licensing arrangements and various revenue sharing agreements and includes eliminations of transactions among segments to reconcile to the Company’s consolidated results. Corporate and Other Adjusted EBITDA includes corporate overhead costs, which consist of certain expenses, such as: payroll, professional feesfees, cybersecurity and other general and administrative expenses.

The tables below highlight the results of our operations. Comparisons between 20242025 and 20232024 are described below. A discussion of changes in our results of operations betweenfor the year ended December 31, 20232024 compared to 20222023 has been omitted from this Annual Report on Form 10-K and can be found in “Item 7 -7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.2024.

Casino expenses consist primarily of salaries and wageswages, gaming taxes, and marketing and advertising costs associated with our gaming operations, gaming taxes and marketing and promotions attributable to our Caesars Digital segment.operations. Food and beverage expenses consist principally of salaries and wages and costs of goods sold associated with our food and beverage operations. Hotel expenses consist principally of salaries and wages, supplies and costs of services associated with our hotel operations. Other expenses consist principally of salaries and wages and costs of goods sold associated with our retail,retail operations, entertainment costs (including professional talent fees), reimbursable management costs and other operations.

General and administrative expenses include items such as information technology, facility maintenance, utilities, property and liability insurance, expenses for administrative departments such as accounting, compliance, purchasing, human resources, legal, internal audit, and property taxes. Generaltaxes and administrative expenses also include other marketing expenses indirectly related to our gaming and non-gaming operations. General and administrative expenses decreased for the year ended December 31, 2024, as compared to the same prior year period, due to lower general advertising expenses and reduced rent expense related to the Rio which was divested at the end of the third quarter of 2023.

Corporate expenses include unallocated expenses such as payrollpayroll, relatedinclusive expenses,of the annual bonus, stock-based compensation, professional fees, cybersecurity and other various expenses not directly related to the Company’s operations. Corporate expenses increased for the year ended December 31, 2025, as compared to the same prior year period, primarily driven by an increase in payroll and benefits expense.

Impairment charges for the year ended December 31, 20242025 were recorded within our Regional segment as a result of a decrease in projected future cash flows at certain properties primarily due to localized competition. Impairment charges to a trademark were also recorded due to the performance of our smallest brand in the Las Vegas segment.

Depreciation and amortization expenses increased for the year ended December 31, 2024,2025, as compared to the same prior year periodperiod, primarily related to recently completed construction projects.

Transaction and other costs, net for the year ended December 31, 2024 primarily includes non-cash losses on the write down and disposal of assets, gains fromand losses on the sales of thecertain WSOPassets, trademarkcertain andnon-recurring thelitigation LINQreserves, Promenade,non-recurring asset recoveries, professional services for transaction and integration costs, various contract exit or termination costs, pre-opening costs in connection with new property openings and expansion projects at existing properties, and non-cash changes in equity method investments. Transaction and other costs, net forFor the year ended December 31, 20232025, alsoas includescompared to the same prior year period, transaction and other costs, net proceedsincreased receivedprimarily due to gains from the sales of the WSOP trademark and the LINQ Promenade recognized in exchangethe forprior participationyear rights in a potential insurance recovery.period.

Other Expenseincome (expenses)

Other expenseincome was(expenses) were as follows:

For the year ended December 31, 2025, loss on extinguishment of debt was related to the full redemption of the CEI Senior Notes due 2027. For the year ended December 31, 2024, loss on extinguishment of debt was primarily related to the prepayments of the CEI Senior Secured Notes due 2025 and the Caesars Resort Collection (“CRC”) Senior Secured Notes and the partial prepayments of the CEI Term Loan B and the CEI Senior Notes due 2027. For the year ended December 31, 2023, loss on extinguishment of debt was primarily related to the prepayments of the CRC Term Loan, the CRC Incremental Term Loan and the Baltimore Term Loan.

The income tax benefit was $11 million for the year ended December 31, 2025, as compared to an income tax provision wasof $87 million for the year ended December 31, 2024,2024. asThe compared to anreported income tax benefit ofin $8882025 milliondiffered forfrom the yearstatutory endedincome Decembertax 31,benefit 2023.primarily due to nondeductible goodwill impairments and nondeductible interest expense. The reported income tax expense in 2024 differed from the statutory income tax benefit primarily due to nondeductible goodwill impairments and write offs and nondeductible interest expense. The reported income tax benefit in 2023 differed from the statutory income tax benefit primarily due to the partial release of federal and state valuation allowances. During the second quarter of 2023, we reversed the valuation allowance related to certain deferred tax assets and recorded a one-time income tax benefit of $940 million, as we determined it was more likely than not that a portion of our federal and state deferred tax assets would be realized. Refer to Item 8. -See Note 14 to our Financial Statements for the effective income tax rate reconciliation.

(a)Prior year gaming volumes include Rio’s table games drop of $70 million and $111 million for the years ended December 31, 2023 and 2022, respectively, and slot handle of $342 million and $530 million for the yearsyear ended December 31, 2023 and 2022, respectively.2023.

(b)Caesars Digital generated an additional $979$951 million, $1.1$979 billionmillion and $1.2$1.1 billion of sports betting handle for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively, which is not included in this table, for select wholly-owned and third-party operations for which Caesars Digital provides services and we receive all, or a share of, the net profits. Hold related to these operations was 9.3%,11.8%, 10.4%9.3% and 11.0%10.4% for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. Sports betting handle includes $41$40 million, $45$41 million and $50$45 million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively, related to horse racing and pari-mutuel wagers.

Caesars Digital’s net revenues, net income (loss), Adjusted EBITDA, and Adjusted EBITDA margin improved significantly for the year ended December 31, 2024,2025, as compared to the same prior year period, primarily due to higher iGaming handle and iGaming hold coupled with improved sports betting hold. TheNet increaseincome was slightly offset by lower sports betting handle. iGaming handle and iGaming hold improved following the launch of Caesars Palace Online Casino in August 2023 and Horseshoe Online Casino app which initially launched in October 2024. Despite improved sports betting hold which reflects the benefit of the continued investment in our sports betting platform, hold remained at the lower end of our expected rangedecreased primarily due to customerthe friendlygain sportsrecognized bettingon outcomesthe sale of the WSOP trademark in the fourthprior quarteryear of 2024.period.

As sports betting and online casinos expand through increased state or jurisdictional legalization, new product launches, and customer adoption, variations in hold percentages and increases in promotional and marketing expenses in highly competitive markets during promotional periods may negatively impact Caesars Digital’s net revenues, net income, Adjusted EBITDA and Adjusted EBITDA margin in comparison to current or prior periods.

We manage several properties and license rights to the use of our brands. These revenue agreements typically include reimbursement of certain costs that we incur directly. Such costs are primarily related to payroll costs incurred on behalf of the properties under management. The revenue related to these reimbursable management costs has a direct impact on our evaluation of Adjusted EBITDA margin which, when excluded, reflects margins typically realized from such agreements. The table below presents the amount included in net revenues and total operating expenses related to these reimbursable costs. In September 2023, we recorded $25 million of additional other revenue related to the termination of the Caesars Dubai management agreement, which has been excluded from Adjusted EBITDA.

Adjusted EBITDA (described below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding our ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents net income (loss) before interest income orand interest expense net of interest capitalized, (benefit) provision for income taxes, depreciation and amortization, stock-based compensation expense, (gain) loss on extinguishment of debt, impairment charges, other (income) loss, net income (loss) attributable to noncontrolling interests, transaction costs associated with our acquisitions, developments, and divestitures, and non-cash changes in equity method investments. Adjusted EBITDA also excludes the expense associated with certain of our leases as these transactions were accounted for as financing obligations and the associated expense is included in interest expense. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP.accounting principles generally accepted in the United States (“GAAP”). Adjusted EBITDA is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, distributions to our noncontrolling interest owners and payments under our leases with affiliates of VICI Properties Inc. and GLPI, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide Adjusted EBITDA information may calculate Adjusted EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt or lease agreements.

The following discussion and analysis of the financial condition and operating results of Caesars Entertainment, Inc., a Delaware corporation, and its consolidated subsidiaries, which may be referred to as the “Company,” “CEI,” “Caesars,” “we,” “our,” or “us,” for the three and six months ended MarchJune 31,30, 2026 and 2025 should be read in conjunction with the unaudited consolidated condensed financial statements and the notes thereto and other financial information included elsewhere in this Form 10-Q as well as our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report”). Capitalized terms used but not defined in this Form 10-Q have the same meanings as in the 2025 Annual Report.

We own, lease or manage an aggregate of 5354 properties in 1920 jurisdictions in North America with approximately 52,60053,800 slot machines, video lottery terminals and e-tables, approximately 2,800 table games and approximately 46,300 hotel rooms as of MarchJune 31,30, 2026. In addition, we have other properties in North America that are authorized to use the brands and marks of Caesars Entertainment, Inc. Our primary source of revenue is generated by our gaming operations, which includes our casino properties, retail and online sports betting, and online gaming. Additionally, we utilize our hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to our properties.

As of MarchJune 31,30, 2026, we owned 22 of our casinos and leased 25 casinos in North America. We lease 18 casinos from VICI Properties L.P., a Delaware limited partnership (“VICI”), pursuant to a regional lease, a Las Vegas lease and a Joliet lease (the “VICI Leases”). We also lease six casinos from GLP Capital, L.P., the operating partnership of Gaming and Leisure Properties, Inc. (“GLPI”) pursuant to a Master Lease (as amended, the “GLPI Master Lease”) and a Lumière lease (together with the GLPI Master Lease, the “GLPI Leases”). In addition, we lease Caesars Windsor from the Ontario Lottery and Gaming Corporation (“OLG”).

We operate and conduct retail and online sports wagering across 34 jurisdictions in North America, 27 of which offer online sports betting. Additionally, we operate iGaming in five jurisdictions in North America. The map below illustrates Caesars Digital’s presence as of MarchJune 31,30, 2026:

We have a partnership with NYRABets LLC, the official online wagering platform of the New York Racing Association, Inc., and operate the Caesars Racebook app in 2223 states as of MarchJune 31,30, 2026. The Caesars Racebook app provides access for pari-mutuel wagering at over 300 racetracks around the world as well as livestreaming of races. Wagers placed can earn credits towards our Caesars Rewards loyalty program or points which can be redeemed for free wagering credits.

We are also in the process of continuing the expansion of our Caesars Digital footprint into other statesjurisdictions in the near term with our Caesars Sportsbook, Caesars Racebook and iGaming mobile apps as jurisdictions legalize or provide necessary approvals. No customers under 21 years old are allowed to wager on any of our Caesars Sportsbook, Caesars Racebook and iGaming mobile apps.

Asset Purchase of Caesars WindsorPurchases

During the threesix months ended MarchJune 31,30, 2026, we recorded a loss of $7 million related to our investment. As of MarchJune 31,30, 2026 and December 31, 2025, our investment in the joint venture totaled $108 million and $115 million, respectively.

The presentation of financial information herein for the periods after the asset purchasepurchases ofpreviously Caesars Windsordescribed is not fully comparable to the periods prior to such asset purchase.purchases.

This MD&A is intended to provide information to assist in better understanding and evaluating our financial condition and results of operations. Our historical operating results may not be indicative of our future results of operations because of the factorfactors described in the preceding paragraph and the changing competitive landscape in our markets, including changes in market and societal trends, increased competition, as well as by factors or trends discussed elsewhere herein. We recommend that you read this MD&A together with our unaudited Financial Statements and the notes to those statements included in this Quarterly Report on Form 10-Q.

(b)See the “Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the Three and Six Months Ended MarchJune 31,30, 2026 and 2025” discussion later in this MD&A for a description of Adjusted EBITDA and a reconciliation of net income (loss) attributable to Caesars to Adjusted EBITDA.

Consolidated comparison of the three and six months ended MarchJune 31,30, 2026 and 2025

Consolidated net revenues increased for the three and six months ended MarchJune 31,30, 2026, as compared to the same prior year period,periods, mainly due to higher casino revenues. This increase in casino revenues was primarily driven by significant growth in iGaming handle coupled with improved sports betting hold in our Caesars Digital segment. In addition, incremental revenues attributable to the consolidation of Caesars Windsor beginning March 3, 20262026, increased visitation in northern Nevada due to a national tournament throughout the second quarter of 2026, and positive results from our capital investments in Lake Tahoe and New Orleans contributed to the increase. These increases were partially offset by declines in net revenues in our Las Vegas segment, attributable to lower table games volume and hold as well as lower city-wide leisure customer visitation.

Casino expenses increased for the three and six months ended MarchJune 31,30, 2026, as compared to the same prior year period,periods, in connection with increased revenues in our Caesars Digital and Regional segments. Gaming taxes increased due to higher casino revenues, as well as the impact of increased gaming tax rates on sports betting wagers and iGaming in certain states, which took effect on July 1, 2025.states. We continue to focus on labor efficiencies across the enterprise to manage increased labor and other costs.

General and administrative expenses include items such as information technology, facility maintenance, utilities, property and liability insurance, property taxes, marketing expenses indirectly related to our gaming and non-gaming operations, and expenses of administrative departments such as accounting, compliance, purchasing, human resources, legal and internal audit. General and administrative expenses increased for the three and six months ended June 30, 2026, as compared to the same prior year periods, primarily due to the consolidation of Caesars Windsor as well as higher property taxes resulting from the expiration of certain property tax credits.

Depreciation and amortization expenses decreased for the three and six months ended MarchJune 31,30, 2026, as compared to the same prior year period,periods, primarily due to a reduction in capital expenditures over time.

Transaction and other costs, net primarily includes non-cash losses on the write down and disposal of assets, gains and losses on the sale of certain assets, certain non-recurring litigation reserves, non-recurring asset recoveries, professional services for transaction and integration costs, various contract exit or termination costs, pre-opening costs in connection with our new property openings and non-cash changes in equity method investments. Transaction and other costs, net decreased for the three and six months ended June 30, 2026, as compared to the same prior year periods, primarily due to non-recurring litigation reserves in the prior year offset by increased transaction costs related to the proposed Merger in the current year.

Interest expense, net decreased for the three and six months ended MarchJune 31,30, 2026, as compared to the same prior year period,periods, primarily due to a reduction in outstanding debt and lower variable rate interest expense. The decrease was slightly offset by an increase in interest expense related to our leases.

The income tax provision for the three months ended MarchJune 31,30, 2026 andis 2025not significantly different from the expected income tax provision based on the federal tax rate of 21%. The income tax provision for the six months ended June 30, 2026 differed from the expected income tax provision based on the federal tax rate of 21% primarily due to an increase in federal and state valuation allowances against the deferred tax assets for excess business interest expense.

Segment comparison of the three and six months ended MarchJune 31,30, 2026 and 2025

Our Las Vegas segment’s net revenues, net income, Adjusted EBITDA and Adjusted EBITDA margin remained relatively flatdeclined for the three and six months ended MarchJune 31,30, 2026, as compared to the same prior year period,periods, primarily due to increased convention and group business offsetting general declines in lower city-wide leisure customer visitation.visitation This changeresulting in visitationdecreased mixnon-gaming also resulted in marginallyrevenues, lower hotel occupancy offsetand bycompressed slightlyhotel higherrates. roomDeclines ratesin astable comparedgames drop and table games hold also contributed to the samedecreases priorin yearnet period.revenues. These decreases were partially offset by increases in slot handle.

Slot win percentage in the Las Vegas segment for the three and six months ended MarchJune 31,30, 2026 was within our typical range.

Our Regional segment’s net revenuesrevenues, net income (loss), and Adjusted EBITDA increased for the three months ended MarchJune 31,30, 2026, as compared to the same prior year period, primarily due to the consolidation of Caesars Windsor beginning March 3, 2026, increased visitation in northern Nevada due to a national tournament throughout the second quarter of 2026 and positive results driven by our recent capital investments in Lake Tahoe.Tahoe These increases offset a decline in net revenues at ourand New OrleansOrleans. property driven by Super Bowl visitation and associated net revenues during the same prior year period. Net income (loss), Adjusted EBITDA and Adjusted EBITDA margin declined slightlySimilarly, for the threesix months ended MarchJune 31,30, 2026, as compared to the same prior year period, net revenues and Adjusted EBITDA increased while net income decreased slightly. Adjusted EBITDA margin remained relatively flat for the three and six months ended June 30, 2026, despite the increased net revenues primarily due to increased labor costs and gaming taxes.

Slot win percentage in the Regional segment for the three and six months ended MarchJune 31,30, 2026 was within our typical range.

(a)Includes total promotional and complimentary incentives related to sports betting, iGaming, and online poker of $86$78 million and $73$72 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $164 million and $145 million for the six months ended June 30, 2026 and 2025, respectively. Promotional and complimentary incentives for online poker were $3$4 million and $5 million for both the three months ended MarchJune 31,30, 2026 and 2025.2025, respectively, and $7 million and $8 million for the six months ended June 30, 2026 and 2025, respectively.

(b)Caesars Digital generated an additional $232$187 million and $269$199 million of sports betting handle for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $419 million and $468 million for the six months ended June 30, 2026 and 2025, respectively, which is not included in this table, for select wholly-owned and third-party operations for which Caesars Digital provides services and we receive all, or a share of, the net profits. Hold related to these operations was 9.3%10.9% and 11.0%,11.2%, for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and 10.0% and 11.1% for the six months ended June 30, 2026 and 2025, respectively. Sports betting handle includes $10$12 million for both the three months ended MarchJune 31,30, 2026 and 2025, and $22 million for both the six months ended June 30, 2026 and 2025, related to horse racing and pari-mutuel wagers.

Caesars Digital’s net revenues, net income, Adjusted EBITDA, and Adjusted EBITDA margin improved significantlyincreased for the threesix months ended MarchJune 31,30, 2026, as compared to the same prior year period, primarily due to higherincreased iGaming handle coupled with improvedan increase in sports betting and iGaming hold.

Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the Three and Six Months Ended MarchJune 31,30, 2026 and 2025

Adjusted EBITDA (described below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding our ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA representsrepresents, as applicable, net income (loss) before interest income and interest expense net of interest capitalized, (benefit) provision for income taxes, depreciation and amortization, stock-based compensation expense, (gain) loss on extinguishment of debt, impairment charges, other (income) loss, net income (loss) attributable to noncontrolling interests, transaction costs associated with our acquisitions, developments, and divestitures, and non-cash changes in equity method investments. Adjusted EBITDA also excludes the expense associated with certain of our leases as these transactions were accounted for as financing obligations and the associated expense is included in interest expense. Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with accounting principles generally accepted in the United States (“GAAP”). Adjusted EBITDA is unaudited and should not be considered an alternative to, or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA include capital expenditures, interest payments, income taxes, debt principal repayments, distributions to our noncontrolling interest owners and payments under our leases with affiliates of VICI and GLPI, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that provide Adjusted EBITDA information may calculate Adjusted EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the definitions used in any of our debt or lease agreements.

The following table summarizes our Adjusted EBITDA for the three and six months ended MarchJune 31,30, 2026 and 2025, respectively, in addition to reconciling net income (loss) attributable to Caesars to Adjusted EBITDA in accordance with GAAP (unaudited):

(a)Transaction costs and other, net primarily includes costs related to non-cash losses on the write down and disposal of assets, certain non-recurring litigation reserves, professional services for transaction and integration costs, various contract exit or termination costs, pre-opening costs in connection with our new property openings, and non-cash changes in equity method investments.

As of MarchJune 31,30, 2026, our cash on hand and borrowing capacity was as follows:

During the threesix months ended MarchJune 31,30, 2026, our operating activities generated operating cash inflows of $204$675 million, as compared to operating cash inflows of $218$680 million during the threesix months ended MarchJune 31,30, 2025, primarily due to changes in working capital, coupled with the results of operations described above.

We expect that our primary capital requirements going forward will relate to servicing our outstanding indebtedness, rent payments under our GLPI Leases and VICI Leases, and the expansionrenovation and maintenance of our properties. We expect to continue having additional cash uses for federal and certain state income taxes in operating activities.

A significant portion of our liquidity needs are for debt service and payments associated with our leases. Our estimated debt service (including principal and interest) is approximately $607$425 million for the remainder of 2026. We also lease certain real property assets from third parties, including VICI and GLPI. The VICI Leases are subject to annual escalations, that take effect in November of each year, based on the Consumer Price Index (“CPI”). In addition to the CPI escalator, our VICI Leases are also subject to a variable rent adjustment based on certain historical net revenues of our leased properties which beganproperties, in Novemberwhich, 2024. Thethe next such lease year with a variable rent adjustment begins November 2027. We estimate our lease payments to VICI and GLPI to be approximately $1.0$687 billionmillion for the remainder of 2026.

We make capital expenditures and perform continuing refurbishment and maintenance at our properties to maintain our quality standards. Our capital expenditure requirements for the remainder of 2026 include thevarious completion of expansiongrowth and rebrandingrenovation projects and hotel renovations.projects. In addition, we anticipate continued investment in our Caesars Sportsbook and iGaming applications.

Cash used for capital expenditures totaled $168$335 million and $223$453 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, related to our growth, renovation, maintenance, and other capital projects. The following table summarizes our capital expenditures for the threesix months ended MarchJune 31,30, 2026, and an estimated range of capital expenditures for the remainder of 2026.

We have agreements with certain sporting event facilities and professional sports teams primarily for tickets, suites, advertising, marketing, promotional and sponsorship opportunities. The agreements include leasing of event suites that are generally considered short-term leases for which we do not record a right-of-use asset or lease liability and recognizes expenses in the period services are received. As of MarchJune 31,30, 2026 and December 31, 2025, obligations related to these agreements were $312$309 million and $318 million, respectively, with contracts extending through 2040.

As of MarchJune 31,30, 2026, we were in compliance with all of the applicable financial covenants described above.

On October 2, 2024, we announced that our Board authorized a $500 million common stock repurchase program (the”2024 Share Repurchase Program”). Under the 2024 Share Repurchase Program, we may, from time to time, repurchase shares of common stock on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. Under the 2024 Share Repurchase Program, as of MarchJune 31,30, 2026, we have authorization to repurchase up to $221 million more of our outstanding common stock. There were no share repurchases made during the three and six months ended MarchJune 31,30, 20262026. andThe Company repurchased 4,188,466 shares of common stock at an aggregate value of $100 million, excluding commissions or applicable excise tax, during the second quarter of 2025. The 2024 Share Repurchase Program has no time limit and may be suspended or discontinued at any time without notice. There is no minimum number of shares of common stock that we are required to repurchase under the 2024 Share Repurchase Program.

There have been no other material changes during the threesix months ended MarchJune 31,30, 2026 to our contractual obligations as disclosed in Part II, Item 7 of the 2025 Annual Report. See Note 5 to our unaudited Financial Statements, which is included elsewhere in this report, for additional information regarding contractual obligations.