In the aftermath of one of the worst years for Las Vegas tourism in recent memory, Caesars Entertainment CEO Tom Reeg brought a candid, straightforward approach to Tuesday’s earnings call.
Reeg addressed Wall Street analysts collectively for the first time since the end of 2025, a year in which the city hosted 38.5 million visitors, its lowest annual amount during the post-COVID era. A year after welcoming the Super Bowl for the first time, Las Vegas reported visitation declines for every month in 2025, raising questions about the long-term forecast for tourism in Sin City.
Despite the turbulent period, Reeg sees a silver lining in the coming months. For the fourth quarter, Caesars generated revenue from its Las Vegas segment of $1.04 billion, slightly missing analyst expectations of $1.05 billion. While Reeg acknowledged that there is still some softness among leisure customers, he largely dismissed any trepidation of a prolonged slowdown.
“There’s really no crisis happening in Vegas,” Reeg said on Caesars’ 2025 fourth-quarter and full-year earnings call. “It’s normal cyclicality, it will play itself out.”
For the most part, investors agreed, as Caesars jumped 15% on Tuesday evening in the after-hours session. Despite paring some gains Wednesday, Caesars still remained above $22 a share, rebounding from five-year lows earlier this month.
Recovery among Vegas leisure customers on the radar
Though room stays from Caesars’ group and convention segment jumped 17% over the quarter, Reeg is still concerned with occupancy rates among leisure customers. Within the category, he indicated that Caesars performed well during major events such as the Formula One Las Vegas Grand Prix and the Super Bowl. He is more frustrated with mid-week occupancy and weekends without a signature event, intervals he described as “shoulder periods.”
Reeg cited numerous factors for softness among the cohort, including lower visitation from Canadian customers, reduced interstate traffic from California and declines in discount airline tickets. Nevertheless, he said occupancy rates among Caesars’ Vegas properties hovered around 92% across 20,000 rooms, down from about 96% in the fourth quarter of 2024.
“We’re going to work to get back to 96%. There’s nothing unusual happening here,” he said. “I’d expect it to recover as time goes by. We’re already seeing that into the first quarter.”
On a sequential basis, Reeg anticipates continued improvement in Las Vegas through the second quarter. From there, he believes Caesars’ performance over the second half of 2026 is highly dependent on the return of leisure customers.
Reeg alerted analysts that the company plans to renovate Augustus Tower at Caesars Palace over the summer. The renovations will impact about 1,000 rooms, according to Caesars, but Reeg expects the rooms to reopen around this fall’s return of the Grand Prix.
Reeg admitted there was softness in the leisure segment in both Q2 and Q3 of last year.
Other highlights from Caesars earnings call
— Caesars Digital reported adjusted EBITDA of $85 million for the fourth quarter, up from $20 million from the year-ago quarter. The figure set a quarterly record for the segment.
Eric Hession, president of Caesars Digital, said Caesars Sportsbook has consistently improved its hold percentage while creating new opportunities for customers through live betting and parlays. Caesars Sportsbook ended 2025 with a sports betting hold rate of 8.1%. Hession is confident that Caesars can reach its long-term structural hold target of 10% by 2027.
— While Reeg did not dismiss selling a Las Vegas property in 2026, he does not anticipate making a concerted effort to monetize real estate assets on the Strip this year.
As of 31 December 2025, Caesars had outstanding debt of $11.9 billion, the company disclosed in a Form 10-K with the US Securities and Exchange Commission. The company paid down $389 million of debt in 2025, according to Citizens analyst Jordan Bender, who expects the pace of debt reduction to accelerate in the coming quarters. Reeg believes debt markets are strong at the moment.
— Reeg did not change his stance on prediction markets, telling analysts that Caesars will not launch a platform in the foreseeable future. In addition, Reeg remarked that he does not think sports event contracts should be regulated on the federal level, adding that they differ fundamentally from swap products.
Amid warnings from regulators about entering that sector, Reeg responded that Caesars considers its state gaming licences to be among its most valuable assets, which he does not want to jeopardise. However, if the federal courts provide clarity regarding the legality of sports event contracts, he said Caesars could change its stance.
How prediction markets are affecting CZR, competitors
The rise of prediction markets has created a sell-off among traditional sports betting stocks over the first two months of 2026.
As a result, sports betting giants DraftKings and Flutter (FanDuel) have seen their share prices tumble more than 30% year-to-date. After reporting quarterly earnings last week, DraftKings fell to its lowest level since May 2023. The downturn prompted an analyst to ask Reeg if Caesars is reconsidering the timeline of a potential spin-off for Caesars Digital.
“In the current market environment, it’s unlikely that you should see us pursue a separation transaction,” Reeg said.
Overall, Caesars Entertainment generated $2.92 billion in revenue for the quarter ended 31 December 2025, topping analysts’ estimates of $2.87 billion. Caesars generated revenue of $2.83 billion for the comparable period in 2024.
Caesars also reported a GAAP net loss of $250 million compared to net income of $11 million for the comparable prior-year period. The company delivered earnings per share of minus-$0.33, compared to $0.05, a year earlier.
On a full-year basis, Caesars generated GAAP net revenues of $11.5 billion, versus $11.2 billion for the comparable prior-year period. Caesars also reported a 2025 GAAP net loss of $502 million, compared to a net loss of $278 million for the comparable prior-year period.
Matt Rybaltowski
Matt is primarily responsible for long-form feature coverage on complex sports betting scandals. He also provides coverage on finance, M&A and other technological developments.
Original article: https://igamingbusiness.com/finance/caesars-q4-earnings-report-ceo-optimism-vegas/
