Caesars Entertainment, Inc.

Q1 2026 Earnings Call — April 28, 2026

Dan Pulitzer (JPMorgan): Hey, good afternoon, everyone. Thanks for the questions. First, I wanted to talk about Las Vegas a bit. Tom, you said the market feels a bit healthier than maybe 10 months ago. Can you maybe talk about what specifically you're seeing, if there's signs of stabilization in that leisure category, midweek, weekend, high end, low end, just kind of parse out the market a bit in more detail?

Tom (Executive): Yeah, I'd say leisure market has continued to get healthier from the kind of the lows of last summer. We'd expect to see typical, back to typical Vegas seasonality as we get into the hot months, but that leisure customer does feel a little bit firmer than it did, you know, kind of each quarter since third quarter of last year. As I said, it's a tale of weekends, weeks when the market has significant group events significant sporting events, significant attractions, those are exceedingly strong. And we still do have weeks that are soft. We had weeks in April that were soft where we just didn't have a great calendar in the market. But group business this year should be another record for us on top of last year's record. We're excited. In May, the State Farm Conference comes back for us, that'll be a nice lift for us. And we feel better each quarter about how Vegas is performing. And I think the quarters of there's a downdraft that we're trying to catch up to are in the rear view mirror. I think it should be pretty stable going forward. And in terms of high end versus low end, I think it's, as I've said before, I think center strip in general has held up the best. Either end of the strip has held up less well. High end has held up better than low end. But center strip has kind of trumped high end versus low end. We don't have a big bifurcation between, say, Caesar's Palace and Harrah's in terms of performance. It's all fairly uniform for us.

Dan Pulitzer (JPMorgan): Got it. Thanks for the detail. And then more of a kind of high-level one, certainly said you're going to be back in the market on share repurchases in the coming quarters. As you guys think high-level philosophically about the value of the equity, can you just remind me or remind us of how you think about the proposition there, what you think public equity investors are missing or overlooking as it comes to the stock valuation as you think about going back into the open market?

Tom (Executive): I mean, we're looking at you know, the returns we can get through buying our stock. There's obviously a free cash yield associated with that. Paying down debt, we are still more levered than we would, than would be our preference. So there's, you know, a continuing and active desire to delever. And then we have, you know, returns on growth capital projects. And as free cash flow comes in, we decide, you know, which is the most attractive use of that cash flow. And as has been the case in the last, you know, year or so, the answer has typically been some mix of share repurchase and debt repayment. And that's what we'd expect going forward.

Brant Montour (Barclays): Hello, everybody. Good afternoon, and thanks for taking the question. Maybe starting with regionals, Tom, I was wondering if you could give us some comments on that customer and how they're sort of faring in this environment with slightly higher gas prices. Obviously, we have stimulus that started coming in better, but, you know, the March data industry-wide did seem to slow. I know there was some calendar issues, but just sort of how do those sort of – puts and takes sort of net out for you guys and what you're seeing on the ground?

Tom (Executive): I would say the consumer in general, but particularly the regional consumer, has been remarkably resilient through the noise that we've seen in the last couple of months. Regional business in general feels firm. We feel very good about what we're seeing there and what we see going forward. We do have some idiosyncratic stuff in Northern Nevada in particular that's a tailwind for us, but across the board, regionals feel pretty good for us.

Brant Montour (Barclays): Okay, great. Thanks for that. And then maybe for Eric, you said, Eric, that the digital business is still capable of doing 20% top line. You guys reported top line in the low teens in the first quarter, but you gain share and sort of beat the industry on the iGaming side. So how do you get back to that 20% overall net revenue in the current environment?

Eric (Executive): Yeah, I think the first quarter, our sports volumes being down 1% was lower than we would expect for the long term. I think it's just annualizing some of the effects from last year with the Super Bowl being in New Orleans and the teams maybe being not as exciting for people for the Super Bowl caused some of that. And then in addition, the high hold increases offset some of the handle growth. But I think if you have mid-single digits handle growth and then the iCasino side continuing to grow like it is, that's how we can get to that 20% range. You know, as you saw, we grew, you know, much faster than the 50% from a flow-through perspective. So some months and quarters we'll have flow-through that's going to be, you know, higher like we did this quarter. And, you know, we don't need to get that 20% revenue growth to get the bottom line growth that we're targeting.

Lizzie Dove (Goldman Sachs): Hi, thanks for taking the question. Just kind of back to Vegas for a second. There was a lot of talk last year about bringing value back to Vegas, and we've seen one of your peers bring out these all-inclusive packages and whatnot to kind of stimulate that leisure consumer. I'm curious where you are in that kind of process of any kind of pricing changes or how you think about that in terms of bringing back the leisure consumer more into the remainder of the year.

Tom (Executive): Yeah, the team's doing a great job here in Vegas looking at all of our properties and welcoming guests at every price point. We've got the all-you-can-eat and drink at a number of our properties on the east side. We've taken a look at price up and down all of our properties, and I think we're in a pretty good spot to attract every guest to Las Vegas. And Lizzie, keep in mind, I know that narrative has been out there quite a while. We were over 95% occupancy this quarter, so we feel very good about where we are in terms of price value.

Lizzie Dove (Goldman Sachs): Got it. Got it. And then just on the regional side, you know, you're kind of lapping some one-timers in 2Q and, you know, you've got some of these renovations you mentioned with Tahoe and whatnot kind of coming online. Any way to think about that, at least sizing some of these impacts from these renovations that you've been doing and how much that can benefit the remainder of the year?

Tom (Executive): Yeah, I'd rather not get that granular on a per-property basis, but I would say I'd expect regional to be a healthy grower the rest of the year and second quarter's off to a good start.

Barry Jonas (Truist): Hey, I just wanted to dig into that all-inclusive package a little bit more. You recently started out at some of your lower end properties. I guess, what are your expectations there? You know, should we think of it as sort of a break-even proposition, but hopefully you'll get upside from gaming? Just curious to dig in on that a little more.

Tom (Executive): Yeah, we're... We're not pricing anything to break even, Barry. We're looking to be profitable in everything that we do. We know what each room in the portfolio, all 20,000 of them, we would expect when you're filled, how much that generates in revenue, regardless of what they paid to get in the door. So you should think of this as when you're in your softer, you know, your softer periods where there's not significant group lift, that this is a way to bring in people profitably. You shouldn't view them as, you know, a loss leader or even a break-even proposition for us.

Barry Jonas (Truist): Great. That's helpful. And then just for a follow-up, you know, curious if there's been any progress made in looking for some sort of solution to the Vichy lease coverage issues you've talked about in the past. Thank you.

Tom (Executive): Yeah, I appreciate the question. As I said last quarter, I don't want to be providing a blow-by-blow every 90 days about talks that may or may not be happening between us and Vichy. That's... Everybody's well aware of where that lease sits, and when the two of us have something to report, I'll come back to you. I'm not going to keep updating every quarter, but I understand and appreciate the question. Barry?

David Katz (Jefferies): Sorry, just to get myself unmuted. Thanks for taking my question. You've talked about this a little bit, but I wanted to just go at it in a slightly different angle. Within the regional gaming, it's obvious the opportunities you have where you've deployed some capital. There've been a handful of properties that have seen some competition. How have you evolved and deployed your strategies to compete specifically in those markets where there's been some head-on competition?

Tom (Executive): Yeah, we start with service, David, providing the best service in the industry. We've got Caesars Rewards, which we think is our largest acquisition and retention tool. And then as we've spoken to over the past few quarters, we've tweaked our marketing reinvestment especially at competitive properties. To become more competitive, we've ramped that down quarter by quarter over the past four quarters to get more efficient, but the teams have done a fantastic job in our competitive markets, retaining our customers, delivering them excellent service, and giving them reasons to come visit a Caesars property versus one of the new competitors.

David Katz (Jefferies): Understood. And, you know, I know the mantra is sort of wrapping down capital, but are there, you know, any singles and doubles, you know, type projects that may be out there in the regions, you know, to think about in the future and, you know, how might we reflect those?

Tom (Executive): Yeah, David, we're over $3 billion of capital in the last five years into the regional markets. The bulk of that into the properties that generate 80% plus of our regional EBITDA. And so if there's a thought that there's deferred capital out there in our portfolio, that doesn't reflect what you see on the ground and what you see in the investments that we've made in the last five years. There is no big group of projects around the corner. This is normal capital cycle stuff. As you come off a large capital expenditure program that's as broad-based as ours was, it's natural that you then spend some time harvesting that cash flow and then deciding what your next wave would be but that's a couple of years away at a minimum at this point.

John Decree (CBRE Capital Advisors): Hi, guys. I wanted to ask a question about Caesars Rewards. I think earlier in the Callie mentioned it's one of your primary customer acquisition channels for your online business. I think it was relative to sports, but I assume the same for iCasino. Tom or Eric, can you tell us kind of where you are in terms of the penetration of that database as we think about kind of the growth targets going forward? Is there a lot more customer activation ahead? Is it more about just getting greater monetization from customers in the database? If you could elaborate, that'd be helpful.

Tom (Executive): Yeah, I would say that we continue to get better, but there's still a gigantic opportunity in converting customers in our database that are primarily brick and mortar with us and play digitally elsewhere and bringing them into the fold. When we first launched our app on the sports side and, frankly, on the iCasino side before Caesars Palace Online, the experience lagged our peers. That's no longer the case. So it's going to those customers to get another look. And what we find is the brick-and-mortar customer that shows up in digital for us increases their brick-and-mortar spend with us. And I don't think that's because they gamble more. I think it's because we're consolidating wallet share. And that's true of across the Caesars Rewards database. The more places we touch you, whether that's physical and digital, whether that's multiple properties within a market or that's multiple properties across market, the more times we touch you, the more valuable you become as a customer for us. So that's a system-wide focus and effort. You'll see us in Vegas starting to talk to customers about the Caesars campus and all the things that you can do.

You'll check into our property and we'll be giving you information that shows all the places you can use your Caesars rewards outside of the building that you're staying in. So we're leaning into that. We're doing more in digital and it continues to get better, but that's a enormous opportunity for our digital business as we move forward and certainly as new states come online.

John Decree (CBRE Capital Advisors): Thanks, Tom. That's helpful. My follow-up will be right down the same path. You've talked about paying down debt, buying back stock, but at least once a year I ask you about M&A. You obviously think Windsor was a unique situation, but are there markets where you would expect your reach, Canada, U.S., regionals where it would make sense to grow your rewards databases, there's still enough synergy. Have you contemplated or think about M&A at this point at all in terms of expanding the network?

Tom (Executive): Yeah, and John, as you know, we're always willing to look. I would say that purchasing an asset or portfolio of assets in the near-term is for us is unlikely given the yield that we can find in our own stock, which there's far more certainty in that number than what you'd model in an acquisition. So unlikely we'd be a significant buyer going forward. But as you know, that can change depending on the opportunity that's in front of you.

Steve Wychinski (Stifel): Hey, guys. Good afternoon. So, Thomas, you think about the rest of the year in Vegas. Obviously, comps are going to get easier in the back half, and your comments that the FIT bookings look solid are, I mean, obviously are pretty encouraging at this point. But I guess

the question is around, you know, with the FIT business still probably booking more close in at this point, how do you weigh, you know, those solid bookings now versus, you know, let's say gas fuel prices stay relatively elevated for an extended period of time and what that can mean, you know, in terms of drive-in traffic or even, you know, wallet spend as folks, you know, enter Vegas. I guess maybe help us think about the sensitivity that you've seen there in the past.

Tom (Executive): So I would say correlation between gas prices and spend in our portfolio is not particularly high. You know, we're, our average customer typically is at a level of income and worth that that doesn't become a significant factor in their decision. Obviously, as you can certainly get to a level or extended a period of time where that may change, but really, you know, as long as real estate values and the employment picture are solid, our business has typically performed pretty well, and I'd expect that to continue to be the case.

Steve Wychinski (Stifel): Okay, gotcha. And then sticking with Vegas, Tom, you talked about the 95% occupancy rate in Vegas this past quarter. Is there anyone to help us think about how much of that 95% was incentivized, meaning did you guys have to promote more or do any more discounting in order to get that level of occupancy?

Tom (Executive): No, there was no meaningful shift in Casino rooms, the shift you would have seen was more group business first quarter this year than last year, which crowded out some OTA business.

Stephen Grambling (Morgan Stanley): Hey, thank you. One more on Vegas. Just given all the talk about attracting more big conventions like ConAg. It seemed like there was a window coming out of the pandemic where it seemed like Vegas was taking share from other markets given the sphere, Allegiant, expanded convention center. So what are you hearing from meeting planners or the convention community on what the competitive environment for that business looks like and what really moves the needle to get some of these to come to Vegas?

Tom (Executive): Yeah, there's a lot that goes into that. You know, I tell you, for the types of conferences that we're talking about, it's super, super competitive. And that's been the case for, you know, regardless of the pandemic, you know, before or after we're talking about very lucrative conferences. There's no more, you know, everybody's kind of on the same footing as they were prior. There's really no jurisdiction anymore that's not recovered and competitive. The way they were in the past. So we, as a market, provide a very compelling, particularly in the group side, this is what gets lost in that value discussion, on the group side we provide a very compelling value trade. This is a very easy city to get around for your group. there's an unusually broad spectrum of, you know, attractions in the market, entertainment, restaurants, shopping, golf, that all feed into that. You know, and then there's political elements that come in in some of these things. There's just a lot of different levers, and it's unique for each group.

You know, but for us, what we want and what we want the market to focus on is those events like CONAG that lift all boats and are not necessarily the highest profile. You're not going to be in a magazine because you got a great trade show or a conference versus some of the more high profile stuff we've done. But the meat and potatoes of that group business is really what drives the whole city. And, you know, I'm sure I know you talk to everyone in town. Con Ag Week, there was not an unhappy operator in this town. And the more weeks we can fill like that during the year, you know, these are, this is elephant hunting as a market that you're going after. But if you can find even another one or two or three, it moves the needle for everybody. And so that's what we're hoping we can deliver as time goes by.

Stephen Grambling (Morgan Stanley): Got it. And so just to clarify, it sounds it's less about really changing anything, CapEx or pricing, something like that. It's about telling the story.

Tom (Executive): That's right. And then maybe one unrelated follow-up on digital regarding the higher customer acquisition costs. It seems like we entered a window where there's not as many new states and Handle and MUPS have been slower in OSB. So with that in mind, should we be thinking about the higher customer acquisition cost impact as really more about replacing churn and the existing base, or are you still finding opportunities to acquire customers?

Eric (Executive): We find opportunities to acquire customers, you know, the chief opportunity for us, as we've talked about, is our database. But as you know, we've been, you know, what, a third to a half of the promo intensity of our peers. And, you know, our share has been fairly sticky. It's been growing in iCasino. What that tells me is we have lower acquisition cost and lower churn than our peers. And that's been a significant benefit to us, particularly recently, as you've seen others start to talk about customer acquisition costs. Ours have been pretty steady.

Sean Kelly (Bank of America): Hi, good afternoon, everybody. Thanks for taking my question. Maybe to start while we're talking digital for a minute, going back to Eric, just curious on a little bit more color around the iGaming trends you're seeing. Obviously, it's an important growth driver for you. The NGR side sounds super encouraging. Just digging in a little bit more, when we looked at some of the market-wide handle growth and then even kind of net of hold a little bit on the GGR side, it did feel like we saw that slow a bit in Q1. I think a lot of it might have had to do with just slower OSB trends and cross-sell, but just wondering if you could unpack a little bit about what you saw in the market and specifically are you seeing some competition tick up in states like Michigan as well?

Eric (Executive): Yeah, I would say there hasn't been a huge change, Sean, in any direction either way. Our handle is up 20% year over year. It might be down a little bit from the prior years, but also we're talking about a much larger scale. So as that happens, you're going to see the percentages decline to some degree, particularly because we haven't had any new states open in recent times here. But in terms of additional competition, there have been a few new entrants just as companies have exited the market and others have taken their place. But I, again, would say that everything's generally been pretty consistent. We've been keeping our reinvestment levels relatively constant. And to Tom's point, our acquisition costs for the casino side have been kind of flattened down a little bit. And so we're kind of happy with how things are going.

Sean Kelly (Bank of America): Super, thanks for that. And then high level, Tom, earlier on you made an interesting comment about you're not seeing as much, if I caught it right, you're not seeing as much bifurcation between maybe high and low properties in the portfolio as maybe sort of location on the strip. And just sort of wondering if you could kind of expand on that as it relates to as we start to see some changes out there, maybe the opening of Hard Rock towards the latter end of next year. How do you expect that to play? Will that shift any of the center of gravity one way or the other? Just how do you expect it to impact the Caesars portfolio?

Tom (Executive): Yeah, so Sean, I expect that to be a mixed bag for us. Given what they're building and the level of investment that's going in there, I think it's pretty clear that they're going to target the highest end of the market. And so while you've seen our regional CapEx cycle kind of move into a harvest phase. We've shifted capital toward Vegas, and we shift our Vegas capital toward Caesars Palace in Paris, which are two that get high-end business. Mirage coming offline for us, we can see things like the high roller, the zip line, the shows on the east side of the strip have struggled a bit without those 3,000 rooms online. So that'll be a benefit to us when you have almost 4,000 rooms with the guitar tower feeding. Obviously, we're the closest neighbor on most sides of what Hard Rock's doing. So I think we'll have a benefit there. But we're anticipating that the high end will get even more competitive. The entertainment space will get more competitive. I'd expect the cost of the biggest acts will go up. So we'd expect them to be impactful.

But I'd also say given the location and what they're building, we're a little more optimistic that you'll get some of the, you know, what you and I saw back in the day where a new property opens and it expands the market. Visitation goes up. It's not just, you know, cutting up the pie a little smaller. I think they can grow the pie a bit. So we're excited about what they're building and the fact that we're, you know, immediately adjacent to it, both on the east side and at Caesars Palace.

Jordan Bender (Citizens): Good afternoon. Thanks for the question. Maybe to follow up on the last question, Tom, you kind of just talked about maybe how hard rock is going to impact you in the market, but specifically like around kind of the playbook into next year. Like, should we should we anticipate that you guys will have to adjust pricing or change kind of the promotional strategy in the months kind of leading into that opening?

Tom (Executive): Yeah, we'll have a full strategy to combat their opening, but Vegas is a totally different animal than regional. Vegas is a 95% cash business, and you're generating profit from every vertical, whereas regionals are gaming-centric, and a lot of your non-gaming is comp-based business. So keeping your properties full is paramount. So we'll have a strategy to combat that opening. But realize this is a 2% lift in capacity in terms of rooms. So this is not a huge, it's not a seismic event from an occupancy perspective. So it's really just keeping your best customers in your system and minimizing the loss of your most profitable customers. And continuing to elevate the product, as Anthony talked about, full remodel of the Augustus Tower and all the new capital investments that are going into Caesars and Palace ahead of the Hard Rock opening. That's really the key strategy going forward as we prepare for their opening.

Jordan Bender (Citizens): Great. Thank you. And then switching to more broadly, I think you have two union contracts coming up in the next several months. Anything to call out there in terms of either getting those done or extended and any impact? Maybe we should be expecting on the cost side from that.

Tom (Executive): Nothing to talk about at this point. New Jersey comes up this summer. Vegas is not till 28.

Chad Bannon (Macquarie): Afternoon. Thanks for taking my question. Eric, I wanted to ask about the Alberta launch. Anything that you can share around that? I know it's a smaller population, but some good cities in there with Big hockey fans that have probably been coming to the market. How heavy are you guys thinking about leaning in there and anything around a database that you already have ahead of the iGaming launch in July?

Eric (Executive): Yeah, I would agree with kind of everything you said. It's a good opportunity. They actually have a fairly high average wealth per person, but it is on the smaller side in terms of the size of the province. But, you know, that said, it's both sports and iCasino. So we're very optimistic that it'll be a great market. You know, we're, I would say, you know, in terms of our performance in Ontario, it's kind of been kind of middle down the road. And so here when we launch, our app is significantly improved from when it was when we launched Ontario. And so we'll be putting a much more comprehensive launch plan together that will really go after the sports as well as the casino market and will launch with the Horseshoe and Caesars Palace brand. So it'll be a much more significant plan. In terms of having a database already seeded in the market, it's not all that significant. There's just not a huge amount of travel between the different, the United States and Canada from that province. And then in addition, there are some restrictions in terms of how the data can be transferred because it is out of the country or in the country, depending on which way you're looking.

Chad Bannon (Macquarie): Gotcha. Thank you. And then Tom or Anthony, going back to the regional markets, revenues have been stable for several quarters, but margins have declined. In the first quarter, year over year, obviously the Super Bowl was a major headwind, so maybe you would have been closer to growing margins. But are we at the point where – you know, all things considered that we know right now that margins could start to improve if revenues are growing in this low single-digit range that we saw in the first quarter?

Tom (Executive): Yes. Thank you. Appreciate it.

Trey Bowers (Wells Fargo): Hey guys, thanks for the question. Just getting back to the kind of use of cash, is there a leverage ratio that you guys target that once you achieve that, kind of all the cash flows will be used towards buyback? Or not all, but the significant portion of it?

Tom (Executive): I would say it's always going to be a decision as the cash flow comes in. There's not a magic number where all of a sudden it's going to be all share buyback, but we want our leverage to be sub-five times on a lease-adjusted basis.

Trey Bowers (Wells Fargo): Okay, thanks. And then just on the iGaming side of things, it looked like we were pretty close in Virginia. Any thoughts around just which states out there you guys feel pretty good about that might be coming into the system in the next couple years?

Tom (Executive): Very hard to handicap, Trey. I wish it were the case that it were kind of incremental, like a football drive where you get to midfield one year and then field goal range the next year and then it's done the year after that. It's more like a car accident that happens in your vicinity. This stuff comes together very quickly as states get under stress. budget-wise and are looking for revenue. The Virginia situation wasn't really on our radar as a possibility to a week later seemed high probability and then ended up not happening. Illinois, prior to their per-wager tax, a couple days earlier, we were told they're going to legalize iGaming on Saturday night, and it was not even on the radar at the time as a real possibility. So it's very difficult to predict. What's easy to predict is state budgets are tight and getting tighter, and states are going to be looking for avenues to raise revenue, and historically, gaming has been a place to do that. And if you look over the last couple of years, that's really only catalyzed in a way that it was a headwind for us. It was tax increases or per bat taxes. And the reality is those don't raise enough versus the holes they're trying to plug. What really moves the needle is legalizing OSB or iGaming. So I think if you're looking over kind of an intermediate timeframe. I'm highly confident there'll be more jurisdictions available to us. I just hesitate to predict which ones those would be.

Q4 2025 Earnings Call — February 17, 2026

Analyst Dan Pulitzer (JP Morgan): Hey, good afternoon everyone. Thanks for taking my questions. Tom, I was hoping to just check in on Vegas here. I know you spent a good amount of time talking about that leisure customer and the uncertainty there. But as you look out in terms of the booking window, in terms of the kind of near-term trends, are you gaining any traction? And what do you think needs to be done from either a promotion or a value proposition perspective that needs to, in order to get that customer back?

Executive Tom (Title): I think this is normal economic cycle activity in leisure for us. You've got, you know, there's a unique flavor of what's gone on with Canada in terms of international visitation, but I think this is just a kind of normal economic cycle. You know, what we are seeing is, you know, F1 was a very strong event for us. Super Bowl, despite what you read on social media, was an extremely strong event for us year over year. The big event weekends, the big conferences are delivering. It's those soft patches in between. And keep in mind, we were, what, 92.5% occupied for the quarter across 20,000 rooms. If you look back over the history of Caesars in Vegas, this was probably the third or fourth best fourth quarter of all time. So there's really no crisis happening in Vegas. It's normal cyclicality and it'll play itself out. I know that the pricing gets focused on social media. I'm sure if I say the wrong thing in the next 30 seconds, I'll read it on Bloomberg or in the Journal tomorrow. But that's not really what's happening in Vegas. Center Strip is holding up quite well.

The mix of what's available in Vegas, you know, Bill and team at MGM do a good job of running down, you know, between the Sphere and the Raiders and all of the entertainment and the food and beverage and all of the options you have here, they're unsurpassed. And, you know, the fact that we're 93% instead of 96% occupied, of course, we're going to work to get back to 96%, but this is not... There's nothing unusual happening here. I'd expect it to recover as time goes by, and we're already seeing that happen over fourth quarter and into first quarter.

Analyst: Got it. Thank you. And then just turning to the digital side, in terms of iGaming, there's been headlines certainly in Maine and more recently in Virginia in terms of the potential legalization of I guess, where do you stand in terms of the expectation there and the possible list? How close to these being done are they from a regulatory perspective?

Executive Tom (Title): I'm not a good predictor of politics, but Maine appears highly likely to launch. You should think of an iGaming state like Maine as something along the lines of what we saved in the NFL contract in terms of EBITDA at maturity for us. Virginia, as I'm sure you're aware, there's a bill that passed the House. There's a separate bill that passed the Senate. It will go to conference and then to the governor's desk. The fact that we're still alive at this point in the session is... a good sign for brick and mortar operators. There's make well payments as part of the legislation that would benefit us. So our fingers are crossed in Virginia, that would be a very good outcome for us. But I would say just I get asked to predict, you know, what's the next one to go? You know, I would tell you in both Maine and now Virginia, weeks before we were in the position that we're in now, we would have told you we're not particularly optimistic. So this stuff can come together very, very quickly and not necessarily on our radar, on anyone's radar, what will be next.

The overarching truth is you've got a lot of states that have budget issues that are looking for revenue, in many cases with new leadership. Virginia has a new governor that's looking for revenue sources. That can be a good outcome for the casino business. I know in the last 18 months that's been not a great outcome. We've seen taxes on OSB move up. We've seen per bet wager taxes. We're due for some good news in the political cycle, and it looks like there may be some coming. Thanks so much.

Analyst Lizzie Dove (Goldman Sachs): Hi there. Thanks for taking the question. I guess sticking with Vegas, obviously a lot of moving pieces. Appreciate your comments on, you know, leisure and the peak weekends and whatnot. You know, you've got some capital investments that you've mentioned. Obviously some good guys from conferences, you know, first half of this year and one for you, you know, especially in 2Q. So just thinking, I know it's early, but high level, how are you thinking about those puts and takes of how Vegas might play out this year overall?

Executive Tom (Title): Okay, let me, I don't, we don't provide guidance, as you know, but I tell you, you know, as I said, first quarter, I'd expect continued sequential improvement versus fourth quarter. Second quarter starts to look even better. The second half of the year is dependent on what happens with that leisure customer. One take that I should highlight is we're redoing the Octavius Tower, I'm sorry, the Augustus Tower at Caesars Palace over the summer. That's a little less than 1,000 rooms, so we'll time it so that the bulk of the work happens in that softer leisure period. And we'd expect to have those rooms back online for F1, but that is one take for us in 26 that you should consider.

Analyst Lizzie Dove (Goldman Sachs): Got it. That makes sense. And then I guess on the OpEx side, you've done a pretty good job of managing that overall and your margins are still higher than certainly some of your public peers and one of your private peers that comes to mind. How do you think about that long term in terms of where you can still kind of manage that cost side over time?

Executive Tom (Title): Lizzie, we manage it every day as do everybody else in the market. The labor contract increases are more manageable starting last year than they were in the first year of the deal. But we're, as I said... What will help is as occupancy smooths out, it's much easier to schedule. You're not running 1,500 basis point occupancy swings during a week in a property. So I would tell you the margin numbers that we put up in the fourth quarter, that was about as challenging a period as you'll have in a non-COVID environment. I would expect that that will get better as demand continues to firm.

Analyst Brent Montour (Barclays): Hi. Thanks, everybody, for taking my question. So the first is on regionals. Looking at the flow through in the fourth quarter, it looks like it got a little bit worse quarter over quarter. You mentioned calling back some of the programs that you have in place next year is a key tailwind for growth. When do you think we'll see that metric flip? And when you talk about it as a tailwind for growth, what are you sort of baking in for that factor to sort of turn into a tailwind?

Executive Tom (Title): Yeah, I think you started to see it in the third quarter, fourth quarter when you get hit by weather events that hit visitation, you had costs associated with promotional events that were happening in those periods that you can't recoup. So it makes that number look a little janky. I don't think it's changed for us. You should expect to see continued improvement in first quarter and then on through the year. I think what you saw in fourth quarter was really the last two weeks of the year. That's great. Thanks for that, Tom. And just to follow up on Las Vegas, I was hoping we could maybe go one more layer deeper on some of the more tangible pain points that you kind of referenced, international, inbound, but California, interstate traffic, discount airline seats, some of these things that we can kind of put some at least qualitative feelings around, what's gotten better into the first part of the first quarter here and what's sort of still staying as depressed as it was in the fourth quarter?

Executive Tom (Title): I would say between the fourth quarter and the first quarter, I wouldn't say there's been a meaningful shift in any of what you named. The difference is there's more group business in first quarter than there is in fourth quarter, generally speaking. You know, what you've talked about or what you touched on with, you know, Canadian business is a small percentage of total visitation to the market, but was an outsized percentage of room night loss in 26th. Southern California drive-in was softer in 25. That was coincided with immigration crackdowns that left people, let's call it, less willing to leave home and drive hours away. And I think as you put more quarters behind you from when the administration made those changes, I think it will gradually come back. The allure of the market has not changed. And we're optimistic as you move through 26 and beyond. Great. Thanks, everyone.

Analyst Stephen Pizzella (Deutsche Bank): Good afternoon. Thank you for taking our questions. As you look at that free cash flow generation you expect to generate in 2026, how are you thinking of balancing debt reduction and buybacks considering where the stock is trading today?

Executive Tom (Title): So we're looking at the same thing you're looking at in terms of the free cash flow yield on the stock. You're going to look at how much cash flow you generate in a quarter. First quarter is a low free cash flow quarter. Second quarter is a big one. So if you think about timing-wise, you should expect us to be more active in the second quarter than the first in a normal year, but we're gonna continue to balance as you've seen us throughout 25 as we go forward.

Analyst: Okay, thank you. And then in Las Vegas, it looks like the other revenue line item was up about 7% year-over-year and a nice increase sequentially. Can you talk about the drivers of that line item and how we should think about that moving forward?

Executive Tom (Title): Let us get you to that on a callback. I don't have that level of detail off my head, off the top of my head.

Analyst John Decree (CBRE): Hi, everyone. Maybe one broad question I don't think we touched on yet, and I know it's difficult to quantify, but kind of early days in tax refund season. Tom, how are you thinking about, from your consumer's perspective, any uplift possibly from tax cuts under the big, beautiful bill, you know, what you typically see? I'm not sure if property managers have kind of reported anything at this point, but you don't think that's a meaningful tailwind for either regionals or Vegas?

Executive Tom (Title): Yeah, I agree with you, John. I think that's a tailwind this year. You're just obviously just now getting to refund season, but you're in, you know, withholding change January 1st. I think people are starting to see my checks a little bigger in 26 versus 25. And, you know, money that comes to consumers like that in kind of an unexpected fashion, I don't know that the average consumer is focused on tax policy as much as, you know, the sample size we have on this call. As that money comes into the system, that's the kind of money that benefits all consumer discretionary businesses, entertainment based businesses. So we think that can be a tailwind across the enterprise in 26. Thanks, Tom.

Analyst: Maybe another kind of topic for this year, Olympics, World Cup events, you know, maybe Eric, specifically, have you seen any kind of material volumes around the Olympics, and do you have any expectations for World Cup as it relates to the digital business for this year?

Executive Eric (Title): Yeah, there's always interest around the Olympics. The Summer Olympics, though, really drive a lot more volume than the Winter Olympics, and candidly, it's 80% on basketball. The Winter Olympics are fine, and we offer a great menu for the customers, but it doesn't drive huge amount of volume for us. You know, conversely, we do think that the World Cup will be very interesting. We plan to offer, you know, a number of promotions. We're planning to really revamp the offerings that we have in terms of the markets that we list for soccer leading up to the World Cup. And so from that perspective, the World Cup is something that will drive significant volume and some hopefully good outcomes on the win side. Thanks, Eric. Thanks, Tom.

Analyst David Katz (Jefferies): Afternoon. Thanks for taking my question. I wanted to just look at regional gaming holistically. And it certainly looks like there's not just for you, but for everyone, there is sort of a lot of pressures from a number of different directions. If I'm characterizing the right way, whether it's skill games in some places or HRMs in others, and potentially iGaming, if you would consider that a competition. How are you thinking about sort of the Caesars value proposition in that context, which looks like just a busier landscape than it's been?

Executive Tom (Title): I mean, our benefit there is Caesar's rewards. We have a unique offering. We used, as you know, David, we used to run a one-card program at El Dorado, and the reality was not a lot of people wanted to go from Erie, Pennsylvania, to Shreveport, Louisiana, or to Reno, you know, between those places. The difference in Caesars is we've got 20,000 rooms on the Strip. We've got destination properties like Lake Tahoe, New Orleans, Atlantic City that really create that hub and spoke system and allows us to differentiate ourselves. To your point, the convenience-based slot dominant product, it is hard to differentiate yourself from the product standpoint, so you do it in service, and everybody, us and all of our peers would tell you we're very good at service, we're better than others. As we know, that can't be the case for all of us, but we all believe that. But the Caesars Rewards Network is truly a unique animal in that space and has been beneficial in regionals for us, you know, for a very long time. If you look at the legacy Eldorado properties that came into Caesars Rewards in the merger, your average revenue left was in the mid single digits. And that was purely by entering the Caesars Reward Network. So that is our chief benefit and our chief calling card in regionals.

Analyst: Okay, got it. And if I can just go back to Las Vegas for a minute. You know, one of the debates we have with everybody around the sort of K-shaped economy, when you talk about sort of leisure weakness, are you able to sort of segment some of that weakness between, you know, higher end, lower end, and, you know, whether that's, you know, discernible and, you know, whether you'd call it out and whether you'd classify it as K-shaped or not?

Executive Tom (Title): I mean, I would say premium does hold up better, but I would point you to, you know, look at our hotel numbers and look at MGM's hotel numbers for the quarter. They're pretty similar. And MGM has a higher skew toward premium play or premium rooms, sorry, premium properties. So it's not as simple as, the low end's not doing well. The high end's doing well. That is part of it. But I think also, you know, location in the market plays a part. Center strip has held up better than either end. And going back to the MGM and Caesars comp, MGM has more down at the south end versus our center. And maybe that explains why the numbers look fairly similar. But I think it's too simple to just say premium good, value bad. There's a little more nuance in there. Agreed. Thanks a lot.

Analyst Stephen Benchinski (Steeple): Hey, guys. Good afternoon. So, Tom, kind of sticking to what David's question just was, you mentioned a couple times a leisure traveler is – you know, it's still somewhat soft, but, you know, has stabilized. I guess, you know, what I'm trying to figure out is, is there any kind of data point that you could, you know, point us to that would make you say, you know, you've kind of indeed seen a, you know, a bottom here in that traveler? And I'm not sure the right way to ask that question, but, you know, obviously that customer books very close in. And is there anything, you know, whether you're starting to see those folks book a little bit further in advance or anything else you could point to?

Executive Tom (Title): The booking window is not changing much. Steve, what I tell you is we, our best measure is activity among our rated players, and that's been improving since the summer. But it's still not back above where it was, but it continues to get better. And then you roll in stronger group calendar, that's how you get to sequential improvement as we move forward.

Analyst: Okay, gotcha. And then, Tommy, talk about the reinvestments you guys have done in the regional markets. It sounds like that's going well, given you mentioned their rate of play was strong in the fourth quarter. Anything you could point to that would help us maybe a little bit understand better that those reinvestments are working like you expected?

Executive Tom (Title): Yeah, I look at what you saw yesterday. Second quarter, third quarter, fourth quarter. I wish you saw November, December on its own. We're seeing it flow and we're getting better at culling what's not working. I think you'll see more of that in first quarter. Part of it's what we're doing. Part of it is you get further from competitive openings in terms of properties that are, you know, facing a competitor that added or just came into the market that has not anniversaried, that's a lower percentage than it's been, you know, in prior quarters. And then as you look out to the rest of the year, we have more kind of Caesars or Caesars market specific stuff that helps us like, you know, the bowling calendar in Reno, the spend in Tahoe coming online and, you know, Windsor going from a managed property to an owned property. So our regional pictures should look pretty attractive in 26.

Analyst Barry Jonas (True Security): Hey, guys, thanks for taking my questions. You know, there's obviously been activity in Virginia now beyond just iGaming. There's a bill for a Northern Virginia casino and one for skill games legalization. Tom, how are you thinking about those expansion bills? You know, would you be interested in participating if the Northern Virginia happens? And any thoughts on impact from skill games beyond what you've already commented?

Executive Tom (Title): Yeah, I would say we're always open to looking at new opportunities. Obviously, Danville, Virginia, for us was a huge success. So that's a state that we have warm feelings for the Commonwealth. We have warm feelings for the Commonwealth. Skill games, you're not going to see us involved in skill games, but if there's an opportunity in Northern Virginia, yes, we would take a look.

Analyst: Got it. Okay. And then just as a follow-up, you know, I think there remains a real variance between wholly owned versus leased EBITDA performance. Just curious how we should think about that variance playing out over time.

Executive Tom (Title): There's nothing unusual happening in terms of how we operate. Wholly owned versus leased has been, I guess, unusual. over-impacted by competitive openings. If you think about our properties that have faced significant competitive openings in the last couple of years, they tend to more likely be leased rather than wholly owned. That's coincidental. As you move forward and that impact abates, I'd expect leased and owned to look similar in terms of performance.

Analyst Stephen Grambling (Morgan Stanley): Hey, thank you. Maybe to piggyback on that, certainly starting to see interest rates come down, even some modest cap rate compression in broader real estate. I know you've been thinking about monetizing real estate on the strip in the past, but as you look at the broader landscape and think about the structure of some of these agreements, how would you balance monetizing real estate on the strip going forward?

Executive Tom (Title): Yeah, I mean, Steve, we've talked before. We are always open for business. So if there's interest in any of our assets, we're happy to talk about them. You shouldn't expect to see us running a process on an asset anytime soon. You know, while the capital markets, the debt markets are strong, the debt market has been strong for quite some time. And, you know, these are chunky assets that have a fairly short list of potential buyers. So it's more likely not a change in the capital markets that drives activity. It's somebody deciding I'd like to own a strip asset and becoming aggressive.

Analyst: Fair enough. And then maybe one other one on the digital front. I saw strong monthly actives year over year, particularly relative to the growth in sports betting handle. Can you elaborate a little bit more on how these new consumers or customers compare and contrast to the base? And are you finding generally this is more iGaming customers first? And does that change your view of the mix of online sports betting versus iGaming contribution to EBITDA longer term?

Executive Tom (Title): Yeah, I would say that there really hasn't been a change in the value of the customers that we're signing up. We are improving our retention slightly so that if you look at the lifetime value of the average customer, it does trend up significantly, somewhat as their retention improves. The cost of acquisition has fallen slightly, however, so we're actually able to spend slightly less money, acquire slightly more customers, and then those customers tend to retain a bit longer. And so when you look at our monthly active users, it is trending up through a combination of those factors.

Analyst Chad Bain (Macquarie Capital): Good afternoon. Thanks for taking my question. Sticking on the digital value, I know lately there's been some valuation declines just on the back of the prediction cloud. Obviously, it sounds like there hasn't been much of an impact to you guys or others in the space, so hopefully that understanding or evaluation changes. But how are you thinking about, you know, spinning out this business, kind of the path of that that you've talked about before, or maybe just providing any more spotlight on the value of this business?

Executive Tom (Title): Yeah, Chad, you know, I'd say we will do what maximizes success, value to shareholders over the long term. I would say, given what we've seen in valuations in the space over the past six to nine months, this doesn't seem like a market that screams you should come and offer some equity of any kind. So unlikely you see something in the near term. And what we've told you in the past is our focus is on hitting our numbers, scaling the business, proving it's scalable, and we're still in the midst of that and making great progress. Expect to continue to make more, but in the current market environment, it's unlikely you should see us pursue a separation transaction.

Analyst: Okay, thanks. And then lastly, on just AI benefits, whether it's searching for travel on the leisure side. I know that's been a big topic this quarter, geo versus SEO, and maybe some potential savings. I'm not sure if there's still opportunities there, but maybe just in terms of search or other marketing or purchasing, should we expect any financial benefits from AI improvements that you guys are doing in-house or using with some vendors to help in the near term?

Executive Tom (Title): Yeah, the short answer is yes, Chad. We price all sorts of stuff every day, hotel rooms being an obvious example. That's a place where AI can be helpful. AI can be helpful in the digital business in terms of the trading aspect of it. You think about how customers make reservations, how they interact with you on the front end. There's opportunity there. There's a lot of different areas where we're looking at applying AI to further enhance our profitability and our margins, and you should expect to see benefits from that over time.

Analyst Jordan Bender (Citizens): Hey everyone. Thanks for the question, Eric, maybe to start with you on the long-term structural targets. It looks like on average about 100 basis points of improvement every year. Is it kind of fair to assume that trend line continues and we can see 10% by 27? And I just, to unpack that maybe a little bit more, kind of like what's left in the tank between like parlay mix, average lags, improvement in the trading teams, anything that kind of helps us bridge between what we're seeing today to how we get to that 10%?

Executive Eric (Title): Yeah, I think you've said it pretty well. We've consistently improved our hold, and it's not through any single action that's taken. It's through a combination of lots of different efforts towards basically creating a product that the customers want. So what we do is we go through, we say, what are they trying to bet and why is it that they're not able to get their bet through? Or why is it that we're not able to offer this product? Or what are the types of things that they want to do that our app is causing them to be unable to do? And then we fix those things or make it easier for them to find or bet. And typically what customers like to do is they like to bet more parlays and they like to bet live parlays and they like to bet it with more legs and then cash it out and all those things contribute to hold. And so the pricing department is not so much determining what specific margin we're going to charge for a various wager. What they're doing is making sure that the pricing is available and that the price is up so that the customers can bet it whenever they want.

And then through the simple weighted average expected value that we get per bet, that increases over time as those higher hold bets come through with a higher frequency than the lower hold bets. So what you're seeing is that. I do feel very confident that we're going to get to 10%. And, you know, hopefully we'll do better than 100 basis points in 2026. But as you've seen, it's been pretty steady for the last three years.

Analyst: Great, thank you. And Tom, just to follow up, on the regional side, I think you said you feel good about growth for the whole year, but you feel better about the last three quarters of the year. We kind of talked through the puts and takes in the first. Is it fair to assume you're implying 1Q could be down and in the remainder of the year should be up? Was that what you were kind of saying?

Executive Tom (Title): I was saying 1Q, we've got to overcome a little over $10 million of Super Bowl benefit in New Orleans to grow. And then we have really nothing but tailwinds the last three quarters of the year.

Analyst Trey Bowers (Wells Fargo): Hey, guys. I just wanted to build a little on an earlier question around the monthly unique payers. You guys are really a standout in that category, especially against some of the peers out there. Just curious, one, how high do you think that number can go? Is this the right KPI for us to focus on? Should that growth continue to accelerate? I know you talked about retention, but at 19% growth in the quarter and then accelerated every quarter last year, just would really like you guys to dig in a little more there because it seems like a real standout in the industry.

Executive Tom (Title): Yeah, you know, appreciate the compliment on it standing out. It's a metric that we mainly report because it's an industry metric that others use. What we do is we try to drive the components up that contribute to that metric. So like I mentioned, you know, retention is a big one for us. You know, number of active wagers per customer is also important because that indicates their retention is going to be higher. You know, number of states where they play with us. If they go to a brick-and-mortar property, that customer becomes very loyal. And so what we try to do is provide them opportunities to do that. And through a combination of all of those things, it really is a metric of retention. The acquisitions that we get go up and down based on competitive natures and states opening. But really, if we can change the retention over, say, an 18-month period by even a few points, what you'll see is a shift fairly significantly in these unique players. And so I would expect it to continue to increase significantly. You know, 19% is strong, so I don't really have any guidance on that. But every activity that we do from the tech perspective, from the customer service perspective, and from the marketing perspective all ultimately result in that improvement in terms of the unique customers that are using our product.

Analyst Daniel Guglielmo (Capital One Securities): Hi, everyone. Thank you for taking my question. Just one from me. With Caesars-Windsor moving into the regional segment this March, you obviously had to do some work with some of the folks in Canada. Are there additional opportunities for expansion up north, or was this just a unique situation that worked out?

Executive Tom (Title): This was a unique situation for us, Daniel, in terms of we were a longtime manager of the asset. We effectively bought the APCO EBITDA at 2x what it's doing now and think we'll be able to improve upon that as a wholly owned entity. We would look elsewhere in Canada, but I tell you most of what you find in Canada comes with, to get a property the scale of Windsor, you have to operate a number of very, very small properties in tough locations, and that's not typically been interesting to us.