Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with, and is qualified in its entirety by, the audited consolidated financial statements and the notes thereto and other financial information included elsewhere in this Annual Report on Form 10-K.
Caesars Entertainment, Inc., a Delaware corporation, and its subsidiaries, may be referred to as the “Company,” “CEI,” “Caesars,” “we,” “our,” “us,” or the “Registrant.”
We also refer to (i) our Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Balance Sheets as our “Balance Sheets,” (iii) our Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) as our “Statements of Operations,” and (iv) our Consolidated Statements of Cash Flows as our “Statements of Cash Flows.” References to numbered “Notes” refer to Notes to our Consolidated Financial Statements included in Item 8 .
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.”
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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. O ur ticker symbol on the NASDAQ Stock Market is “CZR.”
We own, lease or manage an aggregate of 52 domestic properties in 18 states with approximately 51,400 slot machines, video lottery terminals and e-tables, approximately 2,700 table games and approximately 45,600 hotel rooms as of December 31, 2025. In addition, we have other properties in North America that are authorized to use the brands and marks of Caesars Entertainment, Inc. Our primary source of revenue is generated by our gaming operations, which includes our casino properties, retail and online sports betting and online gaming. Additionally, we utilize our hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to our properties.
As of December 31, 2025, we owned 22 of our casinos and leased 24 casinos in the U.S. 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”). In addition, we 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”). See descriptions below under the “GLPI Leases” and “VICI Leases.”
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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 December 31, 2025:
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 22 states as of December 31, 2025. 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 states 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.
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We periodically divest assets to raise capital or, in previous cases, to comply with conditions, terms, obligations or restrictions imposed by antitrust, gaming and other regulatory entities. The following is a summary of divestitures completed as of December 31, 2025:
Segment
Property/Assets
Date Sold
Sales Price
Caesars Digital
World Series of Poker (“WSOP”) Trademark
October 29, 2024
$500 million
Las Vegas
The LINQ Promenade
December 12, 2024
$275 million
In addition to the divestitures above, the operations of Rio All-Suite Hotel & Casino (“Rio”) were assumed by the lessor on October 2, 2023, and we exited our management agreement with Caesars Dubai on November 16, 2023. See Note 3 for further discussion on these key transactions and any applicable gain (loss) recorded.
Investments and Partnerships
We have investments in unconsolidated affiliates accounted for under the equity method which are recorded in Investment 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 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. 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 years ended December 31, 2025 and 2024, we received distributions of $23 million and $39 million, respectively, and recorded $19 million and $11 million of income related to our investment due to the joint venture’s gains on the sales of certain land parcels, respectively. As of December 31, 2025 and 2024, our investment in the joint venture totaled $115 million and $119 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. See Item 2. “Properties” for listing of properties by segment.
Presentation of Financial Information
The financial information included in this Item 7 for the periods after the Company’s divestiture of various properties or assets, described above, is not fully comparable to the periods prior to the date of divestiture.
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 each of 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 audited consolidated financial statements and the notes to those statements included in this Annual Report on Form 10-K.
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.
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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:
Years Ended December 31,
(Dollars in millions)
Net revenues:
Las Vegas
Regional
Caesars Digital
Managed and Branded
Corporate and Other (a)
Total
Net income (loss)
Adjusted EBITDA (b) :
Las Vegas
Regional
Caesars Digital
Managed and Branded
Corporate and Other (a)
Total
Net income (loss) margin
Adjusted EBITDA margin
(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”)” discussion later in this MD&A for a description of Adjusted EBITDA and a reconciliation of net income (loss) to Adjusted EBITDA.
Consolidated comparison for the years ended December 31, 2025, 2024 and 2023
The tables below highlight the results of our operations. Comparisons between 2025 and 2024 are described below. A discussion of changes in our results of operations for the year ended December 31, 2024 compared to 2023 has been omitted from this Annual Report on Form 10-K and can be found in “ Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
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Net Revenues
Net revenues were as follows:
Years Ended December 31,
Variance
Percent Change
Variance
Percent Change
(Dollars in millions)
Casino
Food and beverage
Hotel
Other
Net Revenues
Consolidated net revenues increased for the year ended December 31, 2025, as compared to the same prior year period. The increase in casino revenues was primarily driven by significant growth in iGaming handle coupled with improved iGaming and sports betting hold in our Caesars Digital segment. The completion of Caesars Virginia’s permanent facility in December 2024 and the renovation and expansion of the rebranded Caesars New Orleans in October 2024 also contributed incremental gaming and non-gaming revenues in 2025. These increases were partially offset by declines in net revenues in certain competitive markets in our Regional segment and net revenues in our Las Vegas region which was due to lower customer visitation, consistent with city-wide trends, and lower table games hold compared to the same prior year period.
Operating Expenses
Operating expenses were as follows:
Years Ended December 31,
Variance
Percent Change
Variance
Percent Change
(Dollars in millions)
Casino
Food and beverage
Hotel
Other
General and administrative
Corporate
Impairment charges
Depreciation and amortization
Transaction and other costs, net
Total operating expenses
* Not meaningful.
Casino expenses consist primarily of salaries and wages, gaming taxes, and marketing and advertising costs associated with 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, supplies and costs of services associated with our hotel operations. Other expenses consist principally of salaries and wages and costs of goods sold associated with our retail operations, entertainment costs (including professional talent fees), reimbursable management costs and other operations.
Casino expenses increased for the year ended December 31, 2025, as compared to the same prior year period. Casino expenses, such as gaming taxes, platform costs and processing fees, rose in connection with increased revenues in our Caesars Digital segment. Additionally, increased gaming tax rates on sports betting wagers and iGaming in certain states took effect on July 1, 2025. Casino expenses in the Regional segment increased in connection with additional casino revenues and targeted customer reinvestment spend in certain competitive markets. Increased casino expenses were partially offset by decreased marketing expenses in our Las Vegas segment associated with the Super Bowl held in Las Vegas in the first quarter of 2024. Food and beverage and hotel expenses have increased due to incremental wages correlating with additional revenues associated with the opening of Caesars Virginia’s permanent facility and the completed renovation and expansion of Caesars New Orleans, as well as higher union and non-union wages. We continue to focus on labor efficiencies across the enterprise to manage increased labor costs.
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General and administrative expenses include items such as information technology, facility maintenance, utilities, property and liability insurance, expenses for administrative departments such as accounting, compliance, purchasing, human resources, legal, internal audit, property taxes and marketing expenses indirectly related to our gaming and non-gaming operations.
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. Corporate expenses increased for the year ended December 31, 2025, as compared to the same prior year period, primarily driven by an increase in payroll and benefits expense.
Impairment charges for the year ended December 31, 2025 were recorded within our Regional segment as a result of a decrease in projected future cash flows at certain properties primarily due to localized competition.
Depreciation and amortization expenses increased for the year ended December 31, 2025, as compared to the same prior year period, primarily related to recently completed construction projects.
Transaction and other costs, net primarily includes non-cash losses on the write down and disposal of assets, gains and losses on the sales of certain assets, certain non-recurring litigation reserves, non-recurring asset recoveries, professional services for transaction and integration costs, various contract exit or termination costs, pre-opening costs in connection with new property openings and non-cash changes in equity method investments. For the year ended December 31, 2025, as compared to the same prior year period, transaction and other costs, net increased primarily due to gains from the sales of the WSOP trademark and the LINQ Promenade recognized in the prior year period.
Other income (expenses)
Other income (expenses) were as follows:
Years Ended December 31,
Variance
Percent Change
Variance
Percent Change
(Dollars in millions)
Interest expense, net
Loss on extinguishment of debt
Other income
Benefit (provision) for income taxes
* Not meaningful.
Interest expense, net decreased for the year ended December 31, 2025, as compared to the same prior year period, primarily due to a reduction in outstanding debt and our strategic shift in our debt mix from higher fixed rate debt to variable rate debt during the first quarter of 2024. Since September 2024, key borrowing rates have been decreased by the Federal Reserve by 175 basis points resulting in significant decreases in our cash paid for interest on our variable debt. Decreased interest expense was partially offset by lower capitalized interest for the year ended December 31, 2025, as compared to the same prior year period, due to the completion of construction projects. See Note 2 to our Financial Statements for the major components of interest expense, net.
For the year ended December 31, 2025, loss on extinguishment of debt was related to the full redemption of the CEI Senior Notes due 2027. For the year ended December 31, 2024, loss on extinguishment of debt was primarily related to the prepayments of the CEI Senior Secured Notes due 2025 and the Caesars Resort Collection (“CRC”) Senior Secured Notes and the partial prepayments of the CEI Term Loan B and the CEI Senior Notes due 2027.
Other income for the year ended December 31, 2024 primarily represents a change in estimate of our disputed claims liability.
The income tax benefit was $11 million for the year ended December 31, 2025, as compared to an income tax provision of $87 million for the year ended December 31, 2024. The reported income tax benefit in 2025 differed from the statutory income tax benefit primarily due to nondeductible goodwill impairments and nondeductible interest expense. The reported income tax expense in 2024 differed from the statutory income tax benefit primarily due to nondeductible goodwill impairments and write offs and nondeductible interest expense. See Note 14 to our Financial Statements for the effective income tax rate reconciliation.
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Segment comparison for the years ended December 31, 2025, 2024 and 2023
Las Vegas Segment
Years Ended December 31,
Variance
Percent Change
Variance
Percent Change
(Dollars in millions)
Net revenues:
Casino
Food and beverage
Hotel
Other
Net revenues
Table games drop (a)
Table games hold %
(1.4) pts
(0.9) pts
Slot handle (a)
Hotel occupancy
(3.4) pts
0.7 pts
Adjusted EBITDA
Adjusted EBITDA margin
(1.9) pts
(0.5) pts
Net income attributable to Caesars
(a) Prior year gaming volumes include Rio’s table games drop of $70 million and slot handle of $342 million for the year ended December 31, 2023.
Our Las Vegas segment’s net revenues, net income, Adjusted EBITDA and Adjusted EBITDA margin decreased for the year ended December 31, 2025, compared to the same prior year period, primarily due to declines in city-wide visitation trends resulting in lower gaming and non-gaming revenues. Casino revenues declined as a result of decreased table and slot volumes, coupled with unfavorable table games hold, which remained within the typical range. Similarly, declines in city-wide visitation resulted in lower hotel occupancy and room rates compared to the prior year period. Other revenue declined as compared to the same prior year period primarily due to the sale of the LINQ Promenade during the fourth quarter of 2024.
Slot win percentage in the Las Vegas segment during the year ended December 31, 2025 was within our typical range.
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Regional Segment
Years Ended December 31,
Variance
Percent Change
Variance
Percent Change
(Dollars in millions)
Net revenues:
Casino
Food and beverage
Hotel
Other
Net revenues
Table games drop
Table games hold %
(0.6) pts
(0.4) pts
Slot handle
Adjusted EBITDA
Adjusted EBITDA margin
(1.6) pts
(1.3) pts
Net income (loss) attributable to Caesars
* Not meaningful.
Our Regional segment’s net revenues improved for the year ended December 31, 2025, as compared to the same prior year period, primarily due to favorable results from our recently completed Caesars Virginia and Caesars New Orleans development projects. These increases were partially offset by the continued impact of competition and inclement weather in several of our regional markets, as well as construction disruption in Lake Tahoe. Adjusted EBITDA and Adjusted EBITDA margin decreased slightly for the year ended December 31, 2025, as compared to the same prior year period, primarily due to increased labor costs and targeted customer reinvestment spend in certain competitive markets. Net income (loss) decreased for the year ended December 31, 2025, as compared to the same prior year period, primarily due to additional depreciation expense resulting from the recently completed development projects.
As a result of the aforementioned factors impacting certain of our properties in the Regional segment, we recorded impairments totaling $182 million during the year ended December 31, 2025.
Slot win percentage in the Regional segment during the year ended December 31, 2025 was within our typical range.
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Caesars Digital Segment
Years Ended December 31,
Variance
Percent Change
Variance
Percent Change
(Dollars in millions)
Net revenues:
Casino (a)
Other
Net revenues
Sports betting handle (b)
Sports betting hold %
1.1 pts
0.7 pts
iGaming handle
iGaming hold %
0.1 pts
0.4 pts
Adjusted EBITDA
Adjusted EBITDA margin
6.7 pts
6.2 pts
Net income (loss) attributable to Caesars
* Not meaningful.
(a) Includes total promotional and complimentary incentives related to sports betting, iGaming, and poker of $309 million, $283 million and $253 million for the years ended December 31, 2025, 2024 and 2023, respectively. Promotional and complimentary incentives for poker were $14 million, $13 million and $14 million for the years ended December 31, 2025, 2024 and 2023, respectively.
(b) Caesars Digital generated an additional $951 million, $979 million and $1.1 billion of sports betting handle for the years ended December 31, 2025, 2024 and 2023, respectively, which is not included in this table, for select wholly-owned and third-party operations for which Caesars Digital provides services and we receive all, or a share of, the net profits. Hold related to these operations was 11.8%, 9.3% and 10.4% for the years ended December 31, 2025, 2024 and 2023, respectively. Sports betting handle includes $40 million, $41 million and $45 million for the years ended December 31, 2025, 2024 and 2023, respectively, related to horse racing and pari-mutuel wagers.
Caesars Digital’s net revenues, Adjusted EBITDA, and Adjusted EBITDA margin improved significantly for the year ended December 31, 2025, as compared to the same prior year period, primarily due to higher iGaming handle and iGaming hold coupled with improved sports betting hold. Net income decreased primarily due to the gain recognized on the sale of the WSOP trademark in the prior year period.
As sports betting and online casinos expand through increased state or jurisdictional legalization, new product launches, and customer adoption, variations in hold percentages and increases in promotional and marketing expenses in highly competitive markets may negatively impact Caesars Digital’s net revenues, net income, Adjusted EBITDA and Adjusted EBITDA margin in comparison to current or prior periods.
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Managed and Branded Segment
Years Ended December 31,
Variance
Percent Change
Variance
Percent Change
(Dollars in millions)
Net revenues:
Other
Net revenues
Adjusted EBITDA
Adjusted EBITDA margin
(1.9) pts
1.1 pts
Net income attributable to Caesars
We manage several properties and license rights to the use of our brands. These revenue agreements typically include reimbursement of certain costs that we incur directly. Such costs are primarily related to payroll costs incurred on behalf of the properties under management. The revenue related to these reimbursable management costs has a direct impact on our evaluation of Adjusted EBITDA margin which, when excluded, reflects margins typically realized from such agreements. The table below presents the amount included in net revenues and total operating expenses related to these reimbursable costs.
Years Ended December 31,
Variance
Percent Change
Variance
Percent Change
(Dollars in millions)
Reimbursable management revenue
Reimbursable management cost
Corporate & Other
Years Ended December 31,
Variance
Percent Change
Variance
Percent Change
(Dollars in millions)
Net revenues:
Casino
Food and beverage
Other
Net revenues
Adjusted EBITDA
* Not meaningful.
Supplemental Unaudited Presentation of Consolidated Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the Years Ended December 31, 2025, 2024 and 2023
Adjusted EBITDA (described below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in understanding our ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results and as a means to evaluate period-to-period results. Adjusted EBITDA represents net income (loss) before interest income 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
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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 agreements.
The following table summarizes our Adjusted EBITDA for the years ended December 31, 2025, 2024 and 2023 in addition to reconciling net income (loss) to Adjusted EBITDA in accordance with GAAP (unaudited):
Years Ended December 31,
(In millions)
Net income (loss) attributable to Caesars
Net income attributable to noncontrolling interests
(Benefit) provision for income taxes (a)
Other income (b)
Loss on extinguishment of debt
Interest expense, net
Impairment charges (c)
Depreciation and amortization
Transaction costs and other, net (d)
Stock-based compensation expense
Adjusted EBITDA
Pre-disposition EBITDA, net (e)
Total Adjusted EBITDA
(a) Benefit for income taxes for the year ended December 31, 2023 includes the release of $940 million of valuation allowance against deferred tax assets.
(b) Other income for the year ended December 31, 2024 primarily represents a change in estimate of our disputed claims liability.
(c) Impairment charges for the years ended December 31, 2025 and 2023 include impairments within our Regional segment. Impairment charges for the year ended December 31, 2024 include impairments within our Regional and Las Vegas segments.
(d) Transaction costs and other, net primarily includes non-cash losses on the write down and disposal of assets, certain non-recurring litigation reserves, non-recurring asset recoveries, gains from the sales of the WSOP trademark and the LINQ Promenade, professional services for transaction and integration costs, various contract exit or termination costs, pre-opening costs in connection with new property openings and expansion projects at existing properties, and non-cash changes in equity method investments.
(e) Adjustment for pre-disposition results of operations reflecting the subtraction of results of operations for Rio All-Suite Hotel & Casino and the LINQ Promenade prior to divestiture, for the relevant periods. See Item 7 - Overview above. Such figures are based on unaudited internal financial statements and have not been reviewed by our auditors for the periods presented. The additional financial information is included to enable the comparison of current results with results of prior periods.
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.
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As of December 31, 2025, our cash on hand and borrowing capacity was as follows:
(In millions)
December 31, 2025
Cash and cash equivalents
Revolver capacity (a)
Revolver capacity committed to letters of credit
Revolver capacity committed as regulatory requirement
Total
(a) Revolver capacity includes $2.1 billion under the CEI Revolving Credit Facility, maturing in January 2028, and $25 million under the CVA Revolving Credit Facility, maturing on April 26, 2029, less $40 million reserved for specific purposes.
During the year ended December 31, 2025, our operating activities generated operating cash inflows of $1.3 billion, as compared to operating cash inflows of $1.1 billion during the year ended December 31, 2024, primarily due to changes in working capital, coupled with the results of operations described above.
On October 2, 2024, we announced that our Board of Directors (“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. During the year ended December 31, 2025, we acquired 9,606,145 shares of our common stock at an aggregate value of $229 million. Under the 2024 Share Repurchase Program, as of December 31, 2025, we have authorization to repurchase up to $221 million more of our outstanding common stock. See “Share Repurchase Programs” below for details.
On July 8, 2025, we fully redeemed all of the $546 million outstanding principal amount of the CEI Senior Notes due 2027 and paid the related accrued interest and expenses with borrowings under the CEI Revolving Credit Facility and proceeds received from the partial repayment and sale of $225 million of notes receivable related to the previously disclosed WSOP trademark sale.
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 expansion and maintenance of our properties. Beginning in 2025 we have had, and expect to continue having, additional cash uses for operating activities as a result of federal and certain state income taxes.
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 $824 million for 2026 . We also lease certain real property assets from third parties, including VICI and GLPI. The VICI Leases are subject to annual escalations, that take effect in November of each year, based on the Consumer Price Index (“CPI”). In addition to the CPI escalator, our VICI leases are also subject to a variable rent adjustment based on certain historical net revenues of our leased properties which began in November 2024. 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 $1.4 billion for 2026 .
We make capital expenditures and perform continuing refurbishment and maintenance at our properties to maintain our quality standards. Our capital expenditure requirements for 2026 include the completion of expansion and rebranding projects and hotel renovations. In addition, we anticipate continued investment in our Caesars Sportsbook and iGaming applications.
Cash used for capital expenditures totaled $805 million, $1.3 billion and $1.3 billion for the years ended December 31, 2025, 2024 and 2023, respectively, related to our growth, renovation, maintenance, and other capital projects. The following table summarizes our estimates for 2026 capital expenditures.
(In millions)
Low
High
Growth and renovation projects
Caesars Digital
Maintenance projects
Total estimated capital expenditures from unrestricted cash
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 recognize expenses in the period services are received. As of December 31, 2025 and 2024 , obligations related to these agreements were $318 million and $421 million, respectively, with contracts extending through 2040.
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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 December 31, 2025, we were in compliance with all of the applicable financial covenants described above.
Share Repurchase Programs
On November 8, 2018, we announced that our Board of Directors authorized a $150 million common stock repurchase program (the “2018 Share Repurchase Program”). In September 2024 we reached the limit of authorized repurchases under the 2018 Share Repurchase Plan and on October 2, 2024, we announced that our Board authorized a $500 million common stock 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. 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.
Share repurchase activity is summarized below:
Years Ended December 31,
(In millions, except share data)
Shares repurchased
Total cost
Shares repurchased
Total cost
2018 Share Repurchase Program
2024 Share Repurchase Program
Total
Under the 2024 Share Repurchase Program, as of December 31, 2025, we have authorization to repurchase up to $221 million more of our outstanding common stock.
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Debt Obligations and Leases
CEI Term Loans and CEI Revolving Credit Facility
CEI is party to a credit agreement, dated as of July 20, 2020, with JPMorgan Chase Bank, N.A., as administrative agent, U.S. Bank National Association, as collateral agent, and certain banks and other financial institutions and lenders party thereto (the “CEI Credit Agreement”), which, as amended, provides for the CEI Revolving Credit Facility in an aggregate principal amount of $2.25 billion (the “CEI Revolving Credit Facility”) and will mature on January 31, 2028. The CEI Revolving Credit Facility includes a letter of credit sub-facility of $388 million and contains reserves of $40 million which are available only for certain permitted uses.
On October 5, 2022, Caesars entered into an amendment to the CEI Credit Agreement pursuant to which we incurred a senior secured term loan in an aggregate principal amount of $750 million (the “CEI Term Loan A”) as a new term loan under the credit agreement and made certain other amendments to the CEI Credit Agreement. The CEI Term Loan A will mature on January 31, 2028. The CEI Term Loan A requires scheduled quarterly payments in amounts equal to 1.25% of the original aggregate principal amount of the CEI Term Loan A, with the balance payable at maturity.
Borrowings under the CEI Revolving Credit Facility and the CEI Term Loan A bear interest, paid at least quarterly, at a rate equal to, at our option, either (a) a forward-looking term rate based on the Secured Overnight Financing Rate (“Term SOFR”) for the applicable interest period plus an adjustment of 0.10% per annum (the “Term SOFR Adjustment” and Term SOFR as so adjusted, “Adjusted Term SOFR”), subject to a floor of 0% or (b) a base rate (the “Base Rate”) determined by reference to the highest of (i) the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Term SOFR plus 1.00% per annum plus, in the case of the CEI Revolving Credit Facility and the CEI Term Loan A only, the Term SOFR Adjustment, in each case, plus an applicable margin. Such applicable margin is 2.25% per annum in the case of any Adjusted Term SOFR loan and 1.25% per annum in the case of any Base Rate loan, subject to three 0.25% step-downs based on our net total leverage ratio. In addition, on a quarterly basis, we are required to pay each lender under the CEI Revolving Credit Facility a commitment fee in respect of any unused commitments under the CEI Revolving Credit Facility in the amount of 0.35% per annum of the principal amount of the unused commitments of such lender, subject to three 0.05% step-downs based on our net total leverage ratio.
On February 6, 2023, we entered into an Incremental Assumption Agreement No. 2 pursuant to which we incurred a new senior secured incremental term loan in an aggregate principal amount of $2.5 billion (the “CEI Term Loan B”) under the CEI Credit Agreement. The CEI Term Loan B requires scheduled quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount of the CEI Term Loan B, with the balance payable at maturity. Borrowings under the CEI Term Loan B, as amended, bear interest, paid at least quarterly, at a rate equal to, at our option, either (a) Term SOFR, subject to a floor of 0.50% or (b) the Base Rate in each case, plus an applicable margin. Such applicable margin is 2.25% per annum in the case of any Term SOFR loan and 1.25% per annum in the case of any Base Rate loan. The CEI Term Loan B will mature on February 6, 2030.
On February 6, 2024, we entered into an Incremental Assumption Agreement No. 3 pursuant to which we incurred a new senior secured incremental term loan in an aggregate principal amount of $2.9 billion (the “CEI Term Loan B-1”) under the CEI Credit Agreement. The CEI Term Loan B-1 requires quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount of the CEI Term Loan B-1, with the balance payable at maturity. Borrowings under the CEI Term Loan B-1, as amended in November 2024, bear interest, paid at least quarterly, at a rate equal to, at our option, either (a) Term SOFR, subject to a floor of 0.50% or (b) the Base Rate, in each case, plus an applicable margin. Such applicable margin is 2.25% per annum in the case of any Term SOFR loan and 1.25% per annum in the case of any Base Rate loan. The CEI Term Loan B-1 will mature on February 6, 2031.
As of December 31, 2025, we had $1.9 billion of available borrowing capacity under the CEI Revolving Credit Facility, after consideration of $83 million in outstanding letters of credit, $46 million committed for regulatory purposes, the outstanding amount, and the reserves described above.
Caesars Virginia Credit Facility due 2029
On April 26, 2024, Caesars Virginia, LLC entered into a credit agreement with Wells Fargo Bank, N.A., as administrative agent and collateral agent, and certain banks and other financial institutions and lenders party thereto, which provides for a senior secured first lien multi-draw term loan facility up to an aggregate principal amount of $400 million (the “CVA Delayed Draw Term Loan”) and a senior secured first lien revolving credit facility in an aggregate principal amount of $25 million (the “CVA Revolving Credit Facility”), both maturing on April 26, 2029.
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The CVA Delayed Draw Term Loan requires quarterly principal payments which began on June 30, 2025. The CVA Revolving Credit Facility and the CVA Delayed Draw Term Loan are subject to a variable rate of interest based on Term SOFR plus an applicable margin. The CVA Revolving Credit Facility includes a $10 million letter of credit sub-facility.
CEI Senior Secured Notes due 2030
On February 6, 2023, we issued $2.0 billion in aggregate principal amount of 7.00% senior secured notes (the “CEI Senior Secured Notes due 2030”) pursuant to an indenture by and among the Company, the subsidiary guarantors party thereto from time to time, U.S. Bank Trust Company, National Association, as trustee, and U.S. Bank National Association, as collateral agent. The CEI Senior Secured Notes due 2030 rank equally with all existing and future first-priority lien obligations of the Company and the subsidiary guarantors. The CEI Senior Secured Notes due 2030 will mature on February 15, 2030, with interest payable semi-annually on February 15 and August 15 of each year.
CEI Senior Secured Notes due 2032
On February 6, 2024, we issued $1.5 billion in aggregate principal amount of 6.50% senior secured notes due 2032 (the “CEI Senior Secured Notes due 2032”) pursuant to an indenture by and among the Company, the subsidiary guarantors party thereto, U.S. Bank Trust Company, National Association, as trustee, and U.S. Bank National Association, as collateral agent. The CEI Senior Secured Notes due 2032 rank equally with all existing and future first-priority lien obligations of the Company and the subsidiary guarantors. The CEI Senior Secured Notes due 2032 will mature on February 15, 2032, with interest payable semi-annually on February 15 and August 15 of each year.
CEI Senior Notes due 2029
On September 24, 2021, we issued $1.2 billion in aggregate principal amount of 4.625% senior notes due 2029 (the “CEI Senior Notes due 2029”) pursuant to an indenture dated as of September 24, 2021 between the Company and U.S. Bank National Association, as trustee. The CEI Senior Notes due 2029 rank equally with all existing and future senior unsecured indebtedness of the Company and the subsidiary guarantors. The CEI Senior Notes due 2029 will mature on October 15, 2029, with interest payable semi-annually on April 15 and October 15 of each year.
CEI Senior Notes due 2032
On October 17, 2024, we issued $1.1 billion in aggregate principal amount of 6.00% senior notes due 2032 (the “CEI Senior Notes due 2032”) pursuant to an indenture dated as of October 17, 2024, by and among the Company, the subsidiary guarantors party thereto, and U.S. Bank Trust Company, National Association, as trustee. The CEI Senior Notes due 2032 rank equally with all existing and future senior unsecured indebtedness of the Company and the subsidiary guarantors. The CEI Senior Notes due 2032 will mature on October 15, 2032, with interest payable semi-annually on April 15 and October 15 of each year.
CEI Senior Notes due 2027
On July 6, 2020, Colt Merger Sub, Inc. (the “Escrow Issuer”) issued $1.8 billion in aggregate principal amount of 8.125% senior notes due 2027 (the “CEI Senior Notes due 2027”) pursuant to an indenture, dated July 6, 2020, by and between the Escrow Issuer and U.S. Bank National Association, as trustee. The CEI Senior Notes due 2027 ranked equally with all existing and future senior unsecured indebtedness of the Company and the subsidiary guarantors. The CEI Senior Notes due 2027 were scheduled to mature on July 1, 2027 with interest payable semi-annually on January 1 and July 1 of each year.
On July 8, 2025, we fully redeemed all of the $546 million outstanding principal amount of the CEI Senior Notes due 2027 and paid the related accrued interest and expenses with borrowings under the CEI Revolving Credit Facility and proceeds received from the partial repayment and sale of $225 million of notes receivable related to the previously disclosed WSOP trademark sale. As a result of the early repayment, we recognized approximately $4 million of loss on extinguishment of debt.
VICI Leases
CEI leases certain real property assets from VICI under the following agreements: (i) for a portfolio of properties located throughout the United States (the “Regional Lease”), (ii) for Caesars Palace Las Vegas and Harrah’s Las Vegas (the “Las Vegas Lease”), and (iii) for Harrah’s Joliet (the “Joliet Lease”), (collectively, “VICI Leases”). The lease agreements, inclusive of all amendments, include (i) a 15-year initial term with four five-year renewal options, (ii) initial annual fixed rent payments of $1.1 billion, subject to annual escalation provisions based on the CPI and a 2% floor which commenced in lease year two of the initial terms and (iii) a variable element based on net revenues of the underlying leased properties which commenced in lease year eight of the initial term.
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The put-call right agreement whereby the Company could have required VICI to purchase and lease back (as lessor), or whereby VICI could require the Company to sell to VICI and lease back (as lessee), the real estate components of the Forum Convention Center, was not exercised by Caesars prior to the end of the Company’s election period. VICI’s election period expires on December 31, 2028. In the event that VICI exercises the option, the Forum Convention Center would be sold at a price and leased back to CEI in accordance to the terms and conditions of the put-call right agreement, as amended.
Our VICI Leases are accounted for as a financing obligation and totaled $11.7 billion as of December 31, 2025. See Note 7 to our Financial Statements for additional information about our VICI Leases and related matters.
GLPI Leases
CEI leases certain real property assets from GLPI under the Master Lease (as amended, the “GLPI Master Lease”). The GLPI Master Lease, encompassing a portfolio of properties within the United States, provides for the lease of land, buildings, structures and other improvements on the land, easements and similar appurtenances to the land and improvements relating to the operation of the leased properties. The GLPI Master Lease, inclusive of all amendments, provides for (i) an initial term of 20 years (through September 2038), (ii) four five-year renewals at the our option, (iii) annual land and building base rent of $24 million and $63 million, respectively, (iv) escalating provisions of building base rent equal to 101.25% of the rent for the preceding year for lease years five and six, 101.75% for lease years seven and eight and 102% for each lease year thereafter, and (v) relief from the operating, capital expenditure and financial covenants in the event of involuntary closures.
CEI also leases the real estate underlying Horseshoe St. Louis from GLPI, (the “Lumière Lease”). The Lumière Lease, inclusive of all amendments, provides for (i) an initial term commencing on September 29, 2020 and ending on October 31, 2033, (ii) four five-year renewal options, (iii) annual rent payments of $23 million, (iv) escalation provisions commencing in lease year two equal to 101.25% of the rent for the preceding year for lease years two through five, 101.75% for lease years six and seven and 102% for each lease year thereafter, and (v) certain relief under the financial covenant in the event of involuntary closures.
The GLPI Leases are accounted for as financing obligations and totaled $1.3 billion as of December 31, 2025. See Note 7 to our Financial Statements for additional information about our GLPI Leases and related matters.
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 in “ Part I, Item 3. Legal Proceedings ” and Note 8 to our Financial Statements, both of which are included elsewhere in this Annual Report on Form 10-K. See “ Part I, Item 1A. Risk Factors—Risks Related to Our Business ” which is included elsewhere in this Annual Report on Form 10-K.
Critical Accounting Policies and Estimates
We prepare our financial statements in conformity with GAAP. In preparing our financial statements, we have made our best estimates and judgments of the amounts and disclosures included in the financial statements, giving regard to materiality. When more than one accounting principle, or method of its application, is generally accepted, we select the principle or method that we consider to be the most appropriate under specific circumstances. Application of these accounting principles requires us to make estimates about the future resolution of existing uncertainties. Certain of our accounting policies, including those in connection with income taxes, goodwill and other indefinite-lived intangible assets, long-lived assets, allowance for credit losses related to certain gaming receivables, self-insurance reserves, and litigation, claims and assessments require that we apply significant judgment in defining the appropriate assumptions for calculating financial estimates.
We consider accounting estimates to be critical accounting policies when:
• the estimates involve matters that are highly uncertain at the time the accounting estimate is made; and
• different estimates or changes to estimates could have a material impact on the reported financial position, changes in financial position, or results of operations.
By their nature, these judgments and estimates are subject to an inherent degree of uncertainty. Our judgments and estimates are based on our historical experience, terms of existing contracts, observance of trends in the industry, information gathered from customer behavior, and information available from other outside sources, as appropriate. Actual results may differ due to the inherent uncertainty involving judgments and estimates.
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Our most critical accounting estimates and assumptions are in the following areas:
Income Taxes
We and our subsidiaries file income tax returns with federal, state and foreign jurisdictions. Our income tax returns are subject to examination by the Internal Revenue Service (“IRS”) and other tax authorities. Positions taken in tax returns are sometimes subject to uncertainty in the tax laws and may not ultimately be accepted by the IRS or other tax authorities. See Note 14 in the accompanying consolidated financial statements for a discussion of the status and impact of examinations by tax authorities.
We record income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the expected future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and as attributable to operating loss and tax credit carryforwards. We reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be realized. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use existing deferred tax assets. During the second quarter of 2023, we evaluated our forecasted adjusted taxable income and objectively verifiable evidence and placed substantial weight on our 2022 and 2023 quarterly earnings, adjusted for non-recurring items, including the interest expense disallowed under the then current tax law. Accordingly, we determined it was more likely than not that a portion of the federal and state deferred tax assets will be realized and, as a result, during the second quarter of 2023, we reversed the valuation allowance related to these deferred tax assets and recorded an income tax benefit of $940 million. We are still carrying a valuation allowance on certain federal and state deferred tax assets that are not more likely than not to be realized in the future. We have assessed the changes to the valuation allowance, including realization of the disallowed interest expense deferred tax asset, using the integrated approach.
As of December 31, 2025, the Company had federal and state net operating loss carryforwards of $15 million and $9.1 billion, respectively, and federal general business tax credit and research tax credit carryforwards of $52 million, which will expire on various dates as follows:
Year of Expiration
Net Operating Losses
Tax Credits
(In millions)
Federal
States
Federal
Do not expire
Under the applicable accounting standards, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The accounting standards also provide guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and disclosure requirements for uncertain tax positions.
Goodwill and Other Indefinite-lived Intangible Assets
Assessing goodwill and other indefinite-lived intangible assets for impairment is a process that requires significant judgment and involves detailed qualitative and quantitative business-specific analysis and many individual assumptions which fluctuate between assessments.
Our annual test for impairment of goodwill and other indefinite-lived intangible assets includes a qualitative assessment (a “step zero” assessment) to determine whether further impairment testing is necessary. To perform the step zero analysis the Company considers general economic conditions, recent and projected financial performance, market competition and changes in the carrying amount of our reporting units for goodwill. We also consider the period of time between the last qualitative assessment performed as well as the passing margin by which fair value exceeded the carrying value. If the qualitative assessment indicates that it is more likely than not that the carrying amount of the reporting unit or indefinite-lived intangible asset exceeds its fair value, the Company does not proceed to a quantitative assessment.
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We determine the estimated fair value of each reporting unit based on a combination of EBITDA, valuation multiples, and estimated future cash flows discounted at rates commensurate with the capital structure and cost of capital of comparable market participants, giving appropriate consideration to the prevailing borrowing rates within the casino industry in general. We also evaluate the aggregate fair value of all of our reporting units and other non-operating assets in comparison to our aggregate debt and equity market capitalization at the test date. EBITDA multiples and discounted cash flows are common measures used to value businesses in our industry.
We determine the fair value of our indefinite-lived intangible assets using either the relief from royalty method, the excess earnings method under the income approach or a replacement cost market approach. The determination of fair value of our reporting units and indefinite-lived intangible assets requires management to make significant assumptions and estimates around the forecasts as well as the selection of discount rates and valuation multiples. Assumptions include the effects of changes in the competitive environment, capital projects, and new developments which may not be realized as projected. Changes in these assumptions and estimates could have a significant impact on the fair value of our reporting units’ intangible assets and result in potential impairment.
We completed our annual impairment tests as of October 1, 2025. As a result, we recognized impairment charges in our Regional segment. Our Regional segment’s impairments were due to a decrease in projected future cash flows at certain regional properties primarily due to localized competition within certain markets. We identified three reporting units in the Regional segment with estimated fair values associated with trademarks and goodwill below their respective carrying values and recorded impairments. This resulted in trademark impairment of $22 million and goodwill impairments of $160 million within the segment for the year ended December 31, 2025.
As of October 1, 2025, three reporting units in the Regional segment and two reporting units in the Las Vegas segment with goodwill totaling $2.5 billion had fair values that did not significantly exceed their respective carrying values. In addition, we identified one trademark totaling $114 million in our Las Vegas segment that did not significantly exceed its carrying value. The reporting units and indefinite-lived intangible assets with carrying values that do not significantly exceed their estimated fair values are primarily assets acquired in a merger when our discount rate was approximately 9.5%. The discount rate used in our annual impairment testing as of October 1, 2025 was approximately 10.0%. To the extent gaming volumes deteriorate in the near future, discount rates increase significantly, or we do not meet our projected performance, we may recognize further impairments, and such impairments could be material. The discount rate represents the most sensitive input in our estimates and an increase of 1% to the discount rate would result in additional impairments of approximately $325 million on the assets that do not significantly exceed their carrying values. In addition, $914 million of goodwill within our Regional segment and $462 million in our Las Vegas segment are associated with reporting units with zero or negative carrying values. See Note 5 for additional information.
Long-Lived Assets
We have significant capital invested in our long-lived assets, and judgments are made in determining the estimated useful lives of assets, salvage values to be assigned to assets, and if or when an asset has been impaired. The accuracy of these estimates affects the amount of depreciation and amortization expense recognized in our financial results and whether we have a gain or loss on the disposal of an asset. We assign lives to our assets based on our standard policy, which is established by management as representative of the useful life of each category of asset. We review the carrying value of our long-lived assets whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. The factors considered by management in performing this assessment include current operating results, trends and prospects, planned construction and renovation projects, as well as the effect of obsolescence, demand, competition, and other economic, legal, and regulatory factors. In estimating expected future cash flows for determining whether an asset is impaired, assets are grouped at the lowest level of identifiable cash flows, which, for most of our assets, is the individual property. See Note 4 for additional information.
Allowance for Credit Losses - Gaming
We reserve an estimated amount for gaming receivables that may not be collected to reduce the Company’s receivables to their net carrying amount. Methodologies for estimating the allowance for credit losses range from specific reserves to various percentages applied to aged receivables. Historical collection rates and reasonable forecasts are considered, as are customer relationships, in determining specific reserves to reflect current expected credit loss. As with many estimates, management must make judgments about potential actions by third parties in establishing and evaluating our reserves for credit losses. As of December 31, 2025, a 5% increase or decrease to the allowance determined based on a percentage of aged receivables would change the reserve by approximately $15 million.
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Self-Insurance Reserves
We are self-insured for various levels of general liability, employee medical insurance coverage and workers’ compensation coverage. Insurance claims and reserves include accruals of estimated settlements for known claims, as well as accruals of estimates for claims incurred but not yet reported. We utilize independent consultants to assist management in its determination of estimated insurance liabilities. While the total cost of claims incurred depends on future developments, in management’s opinion, recorded reserves are adequate to cover future claims payments. Self-insurance reserves for employee medical claims, workers’ compensation and general liability claims are included within Accrued other liabilities on the Balance Sheets.
The assumptions utilized by our actuaries are subject to significant uncertainty and if outcomes differ from these assumptions or events develop or progress in a negative manner, the Company could experience a material adverse effect and additional liabilities may be recorded in the future.
Litigation, Claims and Assessments
We utilize estimates for litigation, claims and assessments. These estimates are based on our knowledge and experience regarding current and past events, as well as assumptions about future events. Changes to our estimates may have an adverse effect on our financial position, results of operations or cash flows. Actual results could differ from these estimates.
Recently Issued Accounting Pronouncements
For information with respect to recent accounting pronouncements and the potential impact of these pronouncements on our Financial Statements, see Note 2, Basis of Presentation and Significant Accounting Policies – Recently Issued Accounting Pronouncements .
