On Tuesday, Caesars Entertainment announced third-quarter group net revenue of $2.9 billion, which was flat year-over-year. That was perhaps the highlight of its Q3 earnings report, as its Las Vegas, regional and digital performance all lagged in the face of economic and regulatory headwinds.
Caesars stock was down about 2% at close Tuesday to $22.09 but continued sliding to $19 in trading Wednesday. Its shares are now down more than 40% year-to-date.
Caesars Las Vegas performance has been down for much of 2025 and analysts had several questions for CEO Tom Reeg about the market’s outlook for next quarter and beyond. The city has seen marked tourism declines this year and macroeconomic uncertainty related to inflation, tariffs and now a government shutdown is putting pressure on consumers.
Reeg was largely dismissive of these concerns in Q1 but shifted his tenor for the last two quarters. In both Q2 and Q3, Reeg acknowledged the softness in the market while asserting future optimism. His analogy in July was that a leaking tire had been patched, but his comments on Tuesday indicated that the leak is not fully stemmed.
“We’re now four months into this step-down in leisure demand for Vegas, and while we’re better than we were in July, we’re still not back to where we were on a year-over-year basis,” Reeg told analysts.
Abnormally poor table-game hold in Las Vegas also cost the company about $30 million in Q3, Reeg estimated. He said the third instalment of the Formula One Las Vegas Grand Prix, set for 20-22 November, is trending “considerably better” than 2024 but “not as good” as 2023. Las Vegas saw economic impact of $1.5 billion from the race in 2023, compared to $934 million last year.
The possibility of selling Las Vegas assets was not ruled out but Reeg confirmed Caesars is not “actively exploring” it.
Caesars Q3 earnings by the numbers
Las Vegas net revenue fell 10% YoY to $952 million, while net profit slid 40% to $132 million. Revenue and profit for the segment are now down 5% and 28% year-to-date, respectively. Regional revenue of $1.5 billion was a 6% YoY increase but profit fell by more than half (-55%) to $56 million. Year-to-date regional profit for Caesars stands at $65 million, down 43% from last year.
Caesars Digital, which buoyed the company’s performance for several quarters with huge growth, saw a slight revenue uptick ($311 million, +2.5%) but profit slipped to a $21 million loss, as opposed to an $11 million gain the previous year period. The segment’s strong performance for the year overall is perhaps best shown by its year-to-date adjusted EBITDA of $151 million, up 55% YoY.
Las Vegas adjusted EBITDA of $379 million in Q3 represented a 19% decrease from last year, while regional was more stable at $506 million (+1.5%).
From a balance sheet perspective, Caesars ended the quarter with total cash and equivalents of $836 million compared to total debt of $11.9 billion. The company redeemed $546 million of debt during the quarter and repurchased $100 million worth of shares.
Reeg encouraged by regional trends
Concerns about regional performance moving forward after a tough Q3 were largely attributed to the push and pull of spending allocations. Reeg said the balance of investing versus cutting back in regional markets “doesn’t happen neatly in 90-day periods” and is in constant flux.
“This stuff happens over a longer period of time, but we are particularly encouraged by the trends that we’re seeing, that suggest that what we’re doing is working and driving more aggregate cash flow, which is the goal of this whole enterprise,” Reeg said.
He acknowledged that often, in any given regional market, Caesars is likely spending less than its competitors. The company has emerged as perhaps the leader in cost-cutting since the Covid pandemic.
In responses to analysts’ questions on the topic, Reeg admitted “that gap, in hindsight, might’ve gotten too wide”, but also seemed to push back at other times on the idea that the company is not spending enough.
“If you look at the regional capital investment across us and our peers, we’ve outpaced everybody in the last five years,” he said. “Let’s harvest those investments, give people a reason to come and see [regional properties]”.
Digital not center of attention in Caesars Q3 earnings
Caesars Digital, which had been the focal point of recent calls, was largely quiet this time around. Analysts have long asked the company whether it would consider spinning off its high-growth digital arm. Caesars has never denied the possibility but remained steadfast on reaching its goal of $500 million in annual EBITDA for the business by 2026.
Both Reeg and digital president Eric Hession noted multiple headwinds that dragged on the sector’s Q3 performance. One was the sale of the World Series of Poker franchise, which closed last October, meaning the YoY comparisons have now phased out. Another was increased gaming tax burdens in multiple states. In the last year, rates have gone up in several key markets, including Illinois, New Jersey, Maryland and Louisiana.
The third, and perhaps least controllable, aspect was player-friendly sports outcomes in September. Particularly during football season, these outcomes have become a central topic for bookmakers in recent years. While overall player focus has shifted to parlays and other volatile bets with higher hold, particularly adverse game results can still drag on performance.
“With game outcomes, obviously we had a third quarter that wasn’t great,” Reeg said. “We’re four of 13 weekends into the fourth quarter, those outcomes have not gotten substantially better … so that will have an impact on where the fourth quarter comes in.”
Prediction markets unavoidable but Caesars licences at risk
No gaming earnings call in 2025 would be complete without mention of prediction markets. Federally licensed financial exchanges such as Kalshi, Robinhood and Crypto.com have evolved to offer contracts on sporting events. Their meteoric growth has started to have real impacts on commercial bookmaking; to wit, Caesars was removed from the S&P 500 stock index in September, displaced by Robinhood.
Caesars is perhaps in a tougher spot than others when it comes to navigating prediction markets. Nevada casinos, between Las Vegas and its home base in Reno, are a huge piece of the company’s operations.
The Nevada Gaming Control Board recently warned its licensees that offering sports prediction markets either in the state or elsewhere could jeopardise their suitability. That risk would seem too big to stomach, even as others like FanDuel and DraftKings – who are absent from mobile wagering in Nevada – are making splashy deals. BetMGM, which is connected to fellow Nevada licencee MGM Resorts, faces a similar conundrum.
“As we’ve said before, we can’t be out in the lead on this one,” Hession told analysts Tuesday. “We’re going to monitor it, make sure we’re not left behind if there’s regulatory clarity…Our best approach at this point is to monitor it, put our plans in place, make sure we’re adequately resourced and be ready to move if there’s a legalisation or definition in either direction.”
Reeg followed with the assertion that Caesars “will not put any” licences at risk for prediction markets. But if there is “a path that develops” to participate, he said Caesars is “preparing and would be prepared to go down that path”.
It was a third quarter largely devoid of positives for Caesars Entertainment, whose stock is falling in the wake of poor Las Vegas and regional performance.