Caesars Entertainment, Inc.: Form 10-Q for the period ended Jun 30, 2026

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 June 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 also refer to (i) our Consolidated Condensed Financial Statements as our “Financial Statements,” (ii) our Consolidated Condensed Balance Sheets as our “Balance Sheets,” (iii) our Consolidated Condensed Statements of Operations and Consolidated Condensed Statements of Comprehensive Income (Loss) as our “Statements of Operations,” and (iv) our Consolidated Condensed Statements of Cash Flows as our “Statements of Cash Flows.” References to numbered “Notes” refer to “Notes to our Consolidated Condensed Financial Statements” included in Item 1, “Unaudited Financial Statements,” unless otherwise noted.

The statements in this discussion regarding our expectations of our future performance, liquidity and capital resources, and other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties. Our actual results may differ materially from those contained in or implied by any forward-looking statements. See “Cautionary Statements Regarding Forward-Looking Information” in this report.

Objective

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to be a narrative explanation of the financial statements and other statistical data that should be read in conjunction with the accompanying financial statements to enhance an investor’s understanding of our financial condition, changes in financial condition and results of operations. Our objectives are: (i) to provide a narrative explanation of our financial statements that will enable investors to see the Company through the eyes of management; (ii) to enhance the overall financial disclosure and provide the context within which financial information should be analyzed; and (iii) to provide information about the quality of, and potential variability of, our earnings and cash flows so that investors can ascertain the likelihood of whether past performance is indicative of future performance.

Overview

We are a geographically diversified gaming and hospitality company that was founded in 1973 by the Carano family with the opening of the Eldorado Hotel Casino in Reno, Nevada. Beginning in 2005, we grew through a series of acquisitions, including the acquisition of MTR Gaming Group, Inc. in 2014, Isle of Capri Casinos, Inc. in 2017, Tropicana Entertainment, Inc. in 2018, Caesars Entertainment Corporation in 2020 and William Hill PLC in 2021. Our ticker symbol on the NASDAQ Stock Market is “CZR.”

We own, lease or manage an aggregate of 54 properties in 20 jurisdictions in North America with approximately 53,800 slot machines, video lottery terminals and e-tables, approximately 2,800 table games and approximately 46,300 hotel rooms as of June 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 June 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 June 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 23 states as of June 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 jurisdictions 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.

Subsequent to June 30, 2026, we launched mobile sports betting and iGaming in Alberta, Canada on July 13, 2026.

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.

Proposed Merger of Caesars Entertainment, Inc. with Fertitta Entertainment, Inc.

On May 27, 2026, Caesars, Fertitta Gaming Holdco, LLC, a Texas limited liability company (“Fertitta Gaming”), Empire Merger Sub, Inc., a Delaware corporation and direct wholly owned subsidiary of Fertitta Gaming (“Merger Sub”), Landry’s Fertitta, LLC, a Texas limited liability company solely for the purposes of Section 9.14 of the Merger Agreement (as defined below), and Hospitality Headquarters, Inc., a Texas corporation, solely for the purposes of Section 9.14(j) therein, entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and direct wholly owned subsidiary of Fertitta Gaming (the “Merger”). During the three and six months ended June 30, 2026, transaction costs related to the pending Merger were $10 million. See Note 1.

The pending Merger may have significant effects on us, including, among others, the significant diversion of management and employee attention from ordinary course matters. For a more extensive discussion of those and other possible effects, please refer to “Risk Factors” in Part II, Item 1A of this report.

Asset Purchases

Caesars Windsor

On March 3, 2026, the Company assumed responsibility for the operations of Caesars Windsor on behalf of the OLG under a 20-year operating agreement. Upon signing the operating and asset purchase agreements, our previous management agreement was terminated. The Company purchased the net assets of Caesars Windsor which included approximately $42 million of furniture and equipment and approximately $12 million in net working capital. In addition, the Company entered into a 20-year lease agreement with the OLG for the buildings and land of Caesars Windsor. The initial term of the lease expires on March 2, 2046 with annual minimum rent expense of approximately $19 million. Caesars Windsor’s management fees and reimbursable management revenues and costs were previously reported within the Managed and Branded segment. Beginning March 3, 2026, the property’s operations are reported within the Regional segment.

Grand Bazaar

The Company previously held a minority interest of approximately 8% in JGB Vegas Retail, LLC (“Grand Bazaar”) and leased certain land, buildings and improvements to Grand Bazaar which operated an indoor/outdoor shopping and entertainment district on the Las Vegas Strip adjacent to the Company’s operations. On May 1, 2026, the Company acquired the remaining outstanding membership interest of Grand Bazaar for total consideration of approximately $66 million, inclusive of $10 million of deferred consideration. The transaction was accounted for as an asset purchase of intangible assets, property and equipment, and working capital.

Investments and Partnerships

We have investments in unconsolidated affiliates accounted for under the equity method which are recorded in Investments in and advances to unconsolidated affiliates on the Balance Sheets.

Pompano Joint Venture

In April 2018, we entered into a joint venture with Cordish Companies (“Cordish”) to plan and develop a mixed-use entertainment and hospitality destination expected to be located on unused land adjacent to the casino at our Pompano property. As the managing member, Cordish will operate the business and manage the development, construction, financing, marketing, leasing, maintenance and day-to-day operation of the various phases of the project. Additionally, Cordish is responsible for the development of the master plan for the project with our input and will submit it for our review and approval. While we hold a 50% variable interest in the joint venture, we are not the primary beneficiary; as such, the investment in the joint venture is accounted for using the equity method and is recorded in Investments in and advances to unconsolidated affiliates on our Balance Sheets. We participate evenly with Cordish in the profits and losses of the joint venture, which are included in Transaction and other costs, net on our Statements of Operations.

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

Reportable Segments

Segment results in this MD&A are presented consistent with the way our management reviews operating results, assesses performance and makes decisions on a “significant market” basis. Management views each of the Company’s casinos as an operating segment. Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, and their management and reporting structure. Our principal operating activities occur in four reportable segments: (1) Las Vegas, (2) Regional, (3) Caesars Digital, and (4) Managed and Branded, in addition to Corporate and Other.

Presentation of Financial Information

The presentation of financial information herein for the periods after the asset purchases previously described is not fully comparable to the periods prior to such asset 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 factors 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.

Key Performance Metrics

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. Table games hold percentage is typically in the range of approximately 16% to 23% of table games 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. 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.

Results of Operations

The following table highlights the results of our operations:

(Dollars in millions)

(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 fees, cybersecurity and other general and administrative expenses.

(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 June 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 June 30, 2026 and 2025

Net Revenues

Net revenues were as follows:

(Dollars in millions)

Consolidated net revenues increased for the three and six months ended June 30, 2026, as compared to the same prior year 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, 2026, 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.

Operating Expenses

Operating expenses were as follows:

(Dollars in millions)

Casino expenses consist principally of salaries and wages, gaming taxes and marketing and advertising costs attributable to our gaming 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 and supplies associated with our hotel operations. Other expenses consist principally of salaries and wages, costs of goods sold associated with our retail operations, entertainment costs, including professional talent fees, reimbursable management costs (described below) and other operations.

Casino expenses increased for the three and six months ended June 30, 2026, as compared to the same prior year 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. We continue to focus on 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.

Corporate expenses include unallocated expenses such as payroll, inclusive of the annual bonus, stock-based compensation, professional fees, cybersecurity and other various expenses not directly related to the Company’s operations.

Depreciation and amortization expenses decreased for the three and six months ended June 30, 2026, as compared to the same prior year 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, 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.

Other income (expenses)

Other income (expenses) were as follows:

(Dollars in millions)

* Not meaningful.

Interest expense, net decreased for the three and six months ended June 30, 2026, as compared to the same prior year 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 June 30, 2026 is not 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.

The income tax provision for the three and six months ended June 30, 2025 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 June 30, 2026 and 2025

Las Vegas Segment

(Dollars in millions)

Our Las Vegas segment’s net revenues, net income, Adjusted EBITDA and Adjusted EBITDA margin declined for the three and six months ended June 30, 2026, as compared to the same prior year periods, primarily due to lower city-wide leisure customer visitation resulting in decreased non-gaming revenues, lower hotel occupancy and compressed hotel rates. Declines in table games drop and table games hold also contributed to the decreases in net 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 June 30, 2026 was within our typical range.

Regional Segment

(Dollars in millions)

* Not meaningful.

Our Regional segment’s net revenues, net income (loss), and Adjusted EBITDA increased for the three months ended June 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 and New Orleans. Similarly, for the six months ended June 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 June 30, 2026 was within our typical range.

Caesars Digital Segment

(Dollars in millions)

(a) Includes total promotional and complimentary incentives related to sports betting, iGaming, and online poker of $78 million and $72 million for the three months ended June 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 $4 million and $5 million for the three months ended June 30, 2026 and 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 $187 million and $199 million of sports betting handle for the three months ended June 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 10.9% and 11.2%, for the three months ended June 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 $12 million for both the three months ended June 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 increased for the three months ended June 30, 2026, as compared to the same prior year period, primarily due to increased sports betting and iGaming handle, coupled with an increase in iGaming hold. Net income, Adjusted EBITDA, and Adjusted EBITDA margin declined for the three months ended June 30, 2026, as compared to the same prior year period, primarily due to increased gaming tax rates on sports betting wagers and iGaming in certain states, combined with lower sports betting hold.

Caesars Digital’s net revenues, net income, Adjusted EBITDA, and Adjusted EBITDA margin increased for the six months ended June 30, 2026, as compared to the same prior year period, primarily due to increased iGaming handle coupled with an increase in sports betting and iGaming hold.

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 may negatively impact Caesars Digital’s net revenues, net income, Adjusted EBITDA and Adjusted EBITDA margin in comparison to current or prior periods.

Managed and Branded Segment

(Dollars in millions)

We manage several properties and license rights to the use of certain 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. Beginning March 3, 2026, Caesars Windsor is consolidated and included in the Regional segment.

(Dollars in millions)

Corporate & Other

(Dollars in millions)

* Not meaningful.

Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the Three and Six Months Ended June 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 represents, 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 June 30, 2026 and 2025, respectively, in addition to reconciling net income (loss) attributable to Caesars to Adjusted EBITDA in accordance with GAAP (unaudited):

(In millions)

(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.

Liquidity and Capital Resources

We are a holding company, and our only significant assets are ownership interests in our subsidiaries. Our ability to fund our obligations depends on existing cash on hand, cash flows from our subsidiaries and our ability to raise capital. Our primary sources of liquidity and capital resources are existing cash on hand, cash flows from operations, availability of borrowings under our CEI Revolving Credit Facility and proceeds from the issuance of debt and equity securities. We may, from time to time, seek to repurchase our common stock or prepay our outstanding indebtedness. Any such purchases or prepayments may be funded by existing cash balances or the incurrence of debt. The amount and timing of any repurchase of debt or common stock will be based on business and market conditions, capital availability, compliance with debt covenants and other considerations. Our cash requirements may fluctuate significantly depending on our decisions with respect to business acquisitions or divestitures and strategic capital and marketing investments.

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

(In millions)

During the six months ended June 30, 2026, our operating activities generated operating cash inflows of $675 million, as compared to operating cash inflows of $680 million during the six months ended June 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 renovation 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 $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, in which, the next such lease year with a variable rent adjustment begins November 2027. We estimate our lease payments to VICI and GLPI to be approximately $687 million 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 various growth and renovation projects. In addition, we anticipate continued investment in our Caesars Sportsbook and iGaming applications.

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

(In millions)

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 June 30, 2026 and December 31, 2025, obligations related to these agreements were $309 million and $318 million, respectively, with contracts extending through 2040.

We have periodically divested assets to raise capital or, in previous cases, to comply with conditions, terms, obligations or restrictions imposed by antitrust, gaming and other regulatory entities. If an agreed upon selling price for future divestitures does not exceed the carrying value of the assets, we may be required to record additional impairment charges in future periods which may be material.

We expect that our current liquidity, including availability of borrowings under our committed credit facility and cash flows from operations will be sufficient to fund our operations, capital requirements and service our outstanding indebtedness for the next twelve months and beyond.

Debt and Master Lease Covenant Compliance

The CEI Revolving Credit Facility, the CEI Term Loan A, the CEI Term Loan B, the CEI Term Loan B-1 and the indentures governing the CEI Senior Secured Notes due 2030, the CEI Senior Secured Notes due 2032, the CEI Senior Notes due 2029 and the CEI Senior Notes due 2032 contain covenants which are standard and customary for these types of agreements. These include negative covenants, which, subject to certain exceptions and baskets, limit our ability to (among other items) incur additional indebtedness, make investments, make restricted payments, including dividends, grant liens, sell assets and make acquisitions.

The CEI Revolving Credit Facility and the CEI Term Loan A include a maximum net total leverage ratio financial covenant of 6.50:1. In addition, the CEI Revolving Credit Facility and the CEI Term Loan A include a minimum fixed charge coverage ratio financial covenant of 2.0:1. From and after the repayment of the CEI Term Loan A, the financial covenants applicable to the CEI Revolving Credit Facility will be tested solely to the extent that certain testing conditions are satisfied. Failure to comply with such covenants could result in an acceleration of the maturity of indebtedness outstanding under the relevant debt agreement.

The GLPI Leases and VICI Leases contain certain covenants requiring minimum capital expenditures based on a percentage of net revenues along with maintaining certain financial ratios. The GLPI Leases require the Company to maintain a minimum adjusted revenue to rent ratio of 1.20:1, applicable to the operations of the underlying leased properties.

The CVA Revolving Credit Facility and the CVA Delayed Draw Term Loan contain covenants which are standard and customary for this type of agreement, including a maximum net total leverage ratio financial covenant of 4:1 and a minimum fixed charge coverage ratio financial covenant of 1.05:1, applicable to the operations of Caesars Virginia.

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

Share Repurchase Programs

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 June 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 June 30, 2026. The 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.

As a result of the proposed Merger, described above, no share repurchases are expected at this time.

Contractual Obligations

There have been no other material changes during the six months ended June 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.

Other Liquidity Matters

We are faced with certain contingencies, from time to time, involving litigation, claims, assessments, environmental remediation or compliance. These commitments and contingencies are discussed in greater detail, when applicable, in “Part II, Item 1. Legal Proceedings” and Note 5 to our unaudited Financial Statements, both of which are included elsewhere in this report. See also “Part I, Item 1A. Risk Factors—Risks Related to Our Business” which is included elsewhere in the 2025 Annual Report.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are included in the 2025 Annual Report. There have been no material changes since December 31, 2025. We have not substantively changed the application of our policies, and there have been no material changes in assumptions or estimation techniques used as compared to those described in the 2025 Annual Report.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements.

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. We are exposed to changes in interest rates primarily from variable rate long-term debt arrangements. We manage our interest rate risk by monitoring interest rates, including future projected rates, and adjusting our mix of fixed and variable rate borrowings.

As of June 30, 2026, long-term variable-rate borrowings totaled $6.0 billion under the CEI Term Loans, the CVA Delayed Draw Term Loan and the CEI Revolving Credit Facility, and no amounts were outstanding under the CVA Revolving Credit Facility. As of June 30, 2026, long-term variable-rate borrowings under the CEI Term Loans, the CVA Delayed Draw Term Loan and the CEI Revolving Credit Facility represented approximately 51% of consolidated long-term debt and the weighted average interest rates on our variable and fixed rate debt were 5.87% and 6.18%, respectively.

All of the variable rate debt instruments are subject to Term SOFR interest rates or a base rate plus a margin.

We evaluate our exposure to market risk by monitoring interest rates in the marketplace and have, on occasion, utilized derivative financial instruments to help manage this risk. We do not utilize derivative financial instruments for trading purposes.

There have been no other material quantitative changes in our market risk exposure, or how such risks are managed from the information previously reported under Part II, Item 7A of the 2025 Annual Report.

(a) Evaluation of Disclosure Controls and Procedures

We have established and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports that we file under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, evaluated and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q are effective to ensure that the information required to be disclosed by us in the reports that we file under the Exchange Act is recorded, processed, summarized, evaluated and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

(b) Changes in Internal Controls

There were no significant changes in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10‑Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The following risk factors update and supplement the risk factors contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. We may disclose changes to such factors or disclose additional factors from time to time in our filings with the SEC.

The announcement and pendency of our agreement to be acquired by Merger Sub may have an adverse effect on our business, operating results and our stock price, and may result in the loss of employees, customers, suppliers, and other business partners.

We are subject to risks in connection with the announcement and pendency of the Merger, including, but not limited to, the following:

• market reaction to the announcement of the Merger;
• changes in our business, operations, financial position, and prospects;
• market assessments of the likelihood that the Merger will be consummated;
• the merger consideration offered per share will not be increased to account for any positive changes in our business, assets, liabilities, prospects, outlook, financial condition, or results of operations during the pendency of the Merger, including any successful execution of our current strategy as an independent company or in the event of any change in the market price of, analyst estimates of, or projections relating to, our common stock;
• potential adverse effects on our relationships with our current customers, suppliers and other business partners, or those with which we are seeking to establish business relationships, due to uncertainties about the Merger;
• the pendency and outcome of the legal proceedings that have been or may be instituted against us, our directors, executive officers and others relating to the transactions contemplated by the Merger Agreement; and
• the possibility of disruption to our business, including increased costs and diversion of management time and resources that could otherwise have been devoted to other opportunities that may have been beneficial to us.

The Merger is subject to certain conditions, some or all of which may not be satisfied, and the Merger may not be completed on a timely basis, if at all.

The obligations of Fertitta Gaming and the Company to complete the Merger are subject to the satisfaction or waiver of a number of conditions, including, among others, (i) the approval of the Merger by the holders of at least a majority of all of the outstanding shares of Company Common Stock, (ii) the expiration or termination of the applicable waiting period under the HSR Act and (iii) the receipt of certain gaming regulatory approvals.

Although Fertitta Gaming and the Company have agreed in the Merger Agreement to use their reasonable best efforts to complete the Transaction as promptly as practicable, many of the closing conditions are not within Fertitta Gaming’s or the Company’s control, and neither company can predict when or if these conditions will be satisfied. If any of these conditions are not satisfied or waived prior to May 27, 2027, which deadline may be extended to August 27, 2027 and November 27, 2027 in certain circumstances, it is possible that the Merger Agreement will be terminated. The failure to satisfy all of the required conditions could delay the completion of the Merger for a significant period of time or prevent it from occurring. Any delay in completing the Merger could cause us not to realize some or all of the benefits that we expect to achieve if the Merger is successfully completed within the expected timeframe. There can be no assurance that all closing conditions will be satisfied or waived, or that the Merger will be completed, within the expected timeframe or at all.

If the parties determine to waive any of the conditions to the closing of the Merger, such decision may have an adverse effect on the Company and our stockholders.

Failure to complete the Merger could negatively affect our stock price and our future business and financial results.

If the Merger is not completed, our ongoing business, financial condition, financial results and stock price may be materially adversely affected. Without realizing any of the benefits of having completed the Merger, we will be subject to a number of risks, including the following:

• the market price of our common stock could decline to the extent that the current market price reflects a market assumption that the Merger will be completed;
• we may experience negative reactions from our employees and may not be able to retain key management personnel and other key employees;
• we will have incurred, and will continue to incur, significant non-recurring costs in connection with the Merger that we may be unable to recover;
• we may experience negative reactions from the financial markets or from suppliers, customers and regulators;
• time and resources committed by our management to matters relating to the Merger could otherwise have been devoted to pursuing other beneficial opportunities for the Company;
• we could owe a termination fee of up to $200 million to Fertitta Gaming under certain circumstances;
• if the Merger Agreement is terminated and our Board seeks another business combination, there can be no assurance that we will be able to find a party willing to enter into a transaction on terms equivalent to or more attractive than the terms to which Fertitta Gaming has agreed in the Merger Agreement; and
• litigation related to any failure to complete the Merger or related to any enforcement proceeding commenced against us or Fertitta Gaming to perform their respective obligations pursuant to the Merger Agreement.

If any of these risks materialize it could materially adversely impact our ongoing business, financial condition, financial results and stock price. Similarly, delays in the completion of the Merger could, among other things, result in additional transaction costs, loss of revenue or other negative effects associated with uncertainty about completion of the Merger.

We will incur direct and indirect costs as a result of the Merger, which may be more expensive to complete than anticipated.

We have incurred, and will continue to incur, substantial costs, expenses and fees for professional services and other transaction costs in connection with the Merger. The Merger may be more expensive to complete than anticipated as a result of unexpected factors or events, including, but not limited to, delays in consents or approvals or developments in the political environment. The Company may incur additional costs or suffer loss of business under third-party contracts that are terminated or that contain change in control or other provisions that may be triggered by the completion of the Merger, and/or losses of, or decreases in orders by, customers, and may also incur costs to maintain employee morale and to retain certain key management personnel and employees. The Company will also incur transaction fees and costs related to formulating operational plans, and the execution of these plans may lead to additional unanticipated costs and time delays. Factors beyond our control could materially affect the total amount or timing of these expenses, many of which, by their nature, are difficult to estimate accurately. Many of these fees and costs are payable by us regardless of whether the Merger is consummated.

We are subject to business uncertainties and contractual restrictions while the Merger is pending, which could adversely affect our business, operating results and our stock price.

Under the terms of the Merger Agreement, we are subject to certain restrictions on the conduct of our business prior to completing the Merger, generally requiring us to conduct our businesses in all material respects in the ordinary course of business, to use reasonable best efforts to cooperate in seeking regulatory approvals, and to not engage in certain specified activities without Fertitta Gaming’s prior consent. We may find that these and other obligations in the Merger Agreement may delay or prevent us from responding, or limit our ability to respond, effectively to competitive pressures, industry developments and future business opportunities that may arise during such period, even if our management and board of directors think such responses may be advisable. Such limitations could adversely affect our business, operating results and our stock price and our perceived acquisition value, regardless of whether the Merger is completed. These risks described may be exacerbated by delays or other adverse developments with respect to the completion of the Merger.

The business relationships of the Company and its subsidiaries may be subject to disruption due to uncertainty associated with the Transaction, which could have an adverse effect on our results of operations, cash flows and financial position.

Parties with which we, or our subsidiaries, do business may be uncertain as to the effects the Merger may have on them, including with respect to current or future business relationships with us or our subsidiaries. These relationships may be subject to disruption as customers, suppliers and other persons with whom we have a business relationship may delay or defer certain business decisions or might decide to terminate, change or renegotiate their relationships with us or consider entering into business relationships with parties other than us or our respective subsidiaries. These disruptions could have an adverse effect on our results of operations, cash flows and financial position. The risk, and adverse effect, of any disruption could be exacerbated by a delay in completion of the Merger or termination of the Merger Agreement.

Uncertainties associated with the Merger may cause a loss of our employees during the pendency of the Merger and under Fertitta Gaming’s ownership following the Merger.

Our current and prospective employees may experience uncertainty about their future roles under Fertitta Gaming’s management following the Merger, which may materially adversely affect our ability to attract, retain, and motivate key personnel during the pendency of the Merger. Our employees could lose productivity as a result of uncertainty regarding their employment following the Merger. Key personnel may depart the Company because of issues relating to the uncertainty and difficulty of the post-closing operations of the Company’s business or a desire not to remain with the Company under Fertitta Gaming’s management following the Transaction. Accordingly, no assurance can be given that we will be able to retain key employees to the same extent that we have been able to in the past. The Company may lose significant expertise and talent relating to the business of the Company. The loss of any member of the senior management team could impair the Company’s ability to execute its business plan and growth strategy, have a negative impact on its revenues and the effective working relationships that its executive management have developed and cause employee morale problems and the loss of additional key employees, agents, managers and clients.

The Merger Agreement contains provisions that limit our ability to pursue alternatives to the Merger, which could discourage a potential competing acquirer of the Company from proposing an alternative transaction.

The Merger Agreement contains provisions that, subject to certain exceptions, limit our ability to solicit, initiate, or knowingly encourage or facilitate, any proposal or inquiry that constitutes, or could reasonably be expected to lead to, an Alternative Proposal (as defined in the Merger Agreement), or take certain other restricted actions in connection therewith. It is possible that these or other provisions in the Merger Agreement might discourage a potential competing acquirer that might have an interest in acquiring all or a significant portion of the Company or pursuing an alternative transaction from considering or proposing such a transaction.

Legal proceedings against the Company and Fertitta Gaming could result in substantial costs, an injunction preventing the completion of the Merger and/or a judgment resulting in the payment of damages.

It is possible that litigation against the Company, Fertitta Gaming, their respective affiliates and/or their respective boards of directors and management may be filed in the future. Even if a lawsuit is unsuccessful, defending against these claims can result in substantial costs. An adverse judgment could result in monetary damages, which could have a negative impact on the Company’s liquidity and financial condition. Such potential lawsuits could prevent or delay the completion of the Transaction and result in significant costs to the Company and/or Fertitta Gaming, including any costs associated with the indemnification of directors and officers. There can be no assurance that any of the defendants will be successful in the outcome of any potential lawsuits.