Regionals, digital buoy Caesars again in Q3 as Las Vegas slump continues

Third-quarter results released Tuesday by Caesars Entertainment showed declines in Las Vegas and modest gains for its regional and Caesars Digital segments, as the company continues to work toward closing its acquisition by Fertitta Entertainment.

Caesars and Fertitta announced the $17.6 billion acquisition in May after months of back-and-forth bidding between Fertitta and fellow investor Carl Icahn, and the deal is expected to close by the midpoint of next year. The Federal Trade Commission requested additional materials related to the merger on 17 September, which extended the timeline for antitrust approval by at least 30 additional days. Caesars shareholders approved the merger by a 65% majority on 22 September.

In Q3, Caesars’ Las Vegas revenue declined 2% year-over-year to $930 million, while adjusted EBITDA ($343 million) and net income ($79 million) fell 10% and 40% YoY, respectively. Through this point in 2026, Las Vegas revenue is -2%, adjusted EBITDA is -8% and net income is -21%.

The company will be taken private once the Fertitta deal is finalised, after its share price has declined from highs of more than $100 in 2021 to about $29 currently. No call was held with analysts this quarter in light of the merger but CEO Tom Reeg spoke about the impending changes last month.

During a keynote at the Global Gaming Expo in Las Vegas, Reeg said it’s “not healthy” to operate a business in 90-day increments due to the obligations of being publicly traded, and that constant pressure is “not how you run a business”, he asserted.

“But what’s exciting for me is we’re combining a restaurant and hospitality business that has over 400 outlets across the country into a single ecosystem that becomes greater than the sum of its parts,” Reeg added.

Strong regional performance

Regionals were a bright spot in Q3 for Caesars, with revenue increasing 6% to $1.6 billion and adjusted EBITDA increasing 3.5% to $524 million. For the year so far, regional adjusted EBITDA is +4.5% ($1.4 billion) while net income is +6% ($69 million).

Currently, Caesars operates 54 total properties across 20 North American jurisdictions, with 46 of those considered regional, or outside of Las Vegas. Feritta’s existing Golden Nugget brand operates eight casinos across the US, seven of which are outside of Las Vegas.

The two companies currently compete in several regional markets:

• Lake Tahoe, NV
• Laughlin, NV
• Atlantic City, NJ
• Lake Charles, LA
• Danville, IL
• Biloxi, MS

When Caesars was acquired by Eldorado Resorts in 2020, multiple properties were divested or sold in order to finalise the deal and satisfy antitrust requirements. Reeg said at G2E that he wouldn’t be surprised “if a property or two ultimately gets divested” in the course of the transaction.

Caesars ended the quarter with $864 in cash and equivalents against total debt of $11.6 billion, which is being assumed as part of the Fertitta merger.

Outside the predictions bubble

Caesars Digital posted $326 million in Q3 revenue, a 5% gain YoY, while adjusted EBITDA soared 57% to $44 million. Net income for the quarter flipped from a $21 million loss in the prior-year period to a $4 million gain this year. Through September, digital revenue is +6%, adjusted EBITDA is +20% and net income has nearly tripled (+194%).

Digital has long been Caesars’ biggest growth vertical, with rumours of a potential sell-off swirling well before the eventual Fertitta acquisition. The company currently offers online sports betting in 28 North American jurisdictions and iGaming in six.

Caesars has been one of the few gambling companies to eschew prediction markets altogether, as it views the controversial platforms as a risk to its retail casino licences. Most of its sports betting and iGaming competitors, including FanDuel, DraftKings and Fanatics, have embraced prediction markets with big investments and pricey customer acquisition campaigns.

At G2E, Reeg decried prediction markets, noting that Kalshi had listed contracts about whether Caesars was going to be acquired. The CEO surmised that he could’ve profited from said contracts if he wanted to.

“There was nowhere in their rules that said I couldn’t place a bet,” Reeg told the crowd.