Caesars Entertainment executives haven’t seen signs of softening consumer behavior in Las Vegas or nationwide. Caesars’ first-quarter earnings call was on the same day Nevada reported a nearly 5% drop in gaming revenue on the Strip in March.
Caesars’ Las Vegas properties recorded $1.00 billion in revenue, down 1.9% from $1.02 billion from the first quarter of 2024. Regional properties reported $1.39 billion in revenue, up 1.7% from $1.37 billion. Caesars Digital reported $335 million in revenue, up 18.8% from $282 million.
While gaming revenue can drop in a market like Las Vegas, two-thirds of revenue comes from non-gaming spending.
President and COO Anthony Carano said Caesars had a good start to 2025, despite regional weather disruptions and a tough comparison against the Super Bowl in Las Vegas during the first quarter of 2024.
“Our results reflect stable trends in the brick-and-mortar segment and continued strong growth in digital, despite poor hold during March Madness,” Carano said.
Carano said Caesars reported its third best adjusted earnings in first-quarter history. Occupancy and daily room rates were down slightly, while slots and electronic table games grew over the first quarter of 2024. Convention room nights accounted for 20% of the mix and the Forum Convention Center delivered a quarter adjusted earnings record.
Las Vegas adjusted earnings margins were 43.2%, up 50 basis points over 2024.
Carano said their new capital projects have delivered better than expected returns, including hotel remodels at Caesars Palace and Paris Las Vegas, along with food and beverage projects at the Flamingo and Planet Hollywood.
“While we recognize the tremendous uncertainty surrounding the economic impact of potential policy changes in the U.S., we are encouraged by the forward outlook for Las Vegas,” Carano said. “We continue to experience solid operating numbers by both leisure and group and convention customers.”
Regionally, Carano said both their New Orleans and Virginia properties, since their improvements, are off to a great start in 2025 and that Caesars looks forward to harvesting that cash flow for years ahead.
CEO Tom Reeg was pleased with the quarter that was consistent with what they said on their fourth-quarter call three months ago. Other than the 2024 Super Bowl comparison in February, on volume and activity the Strip properties would have otherwise been up year-over-year, he said.
“We expect Vegas to grow a little this year, regionals to be flat to slightly up, and digital to post strong growth,” Reeg said. “There’s no change in what we expect to see in the business. We do not see any of the consumer softness that investors seem to be worried about. Our forward bookings still look quite strong. Regionals are still coming in nicely. We do see the same macro picture you do of what’s going to happen with tariffs, consumer spending, and inflation. If you look at where consensus is versus where we were last year, you’d have to see a dramatic downturn in brick-and-mortar performance in the eight months left in the year for us not to be a significant grower of EBITDA in 2025.”
Reeg said the bulk of their customers aren’t stock owners and what consumers see is lower gas prices. While CNBC highlights how wealthy people are losing money in the stock market, that doesn’t equate to their performance.
“If we get to later in the year and you’re seeing real impact macroeconomically, we would not be immune to that, but our customers feel good,” Reeg said. “I feel better about the way the business is going right now than I did at any point in 2024 and I felt pretty good in 2024. That can change, given what’s happening on a macro basis. We’ve had a brutal inflation environment over the last 3½ years, but we’re not impacted by tariffs at all.”
As for declining international travel, Reeg said Caesars is primarily a domestic business, with some international high-end play that is unchanged.
“Canada is something like 3% to 4% of Las Vegas,” Reeg said. “We’ve certainly seen reduction in Canadian visitation, but we’ve been able to because we’re a 97% to 98% occupancy business. At that level, you’re turning away others, so we’ve been able to replace that business. That’s the only one visible to us, but we see the rhetoric elsewhere.”
Regionally, this year’s first quarter was even more difficult than 2024 weather-wise and a deadly terrorist attack in the French Quarter of New Orleans on New Year’s Eve impacted the beginning of the first quarter, along with snowstorms, Reeg said. The Super Bowl helped February with $19 million of adjusted earnings, while March recorded more than $16 million in adjusted earnings.
“We feel very good about pacing there and in regionals generally,” Reeg said. “Digitally, everyone has talked about the March Madness sports outcomes and we weren’t immune. We still posted strong growth year-over-year.”
Eric Hession, president of Caesars Sports & Online, touted the $53 million gain in revenue in the segment, a 19% increase, and $43 million of adjusted earnings, up $38 million year-over-year. Sports betting revenue grew 9%, while igaming revenue grew 53%, following last year’s first-quarter growth exceeding 50%.
Through the first 27 days of April, Reeg said igaming revenue is up almost 70% year-over-year.
On a hold-adjusted basis, the digital segment would have grown by $88 million or 31% year-over-year and adjusted earnings by $60 million. Net revenue grew by higher hold and less promotional activity despite the problems with the NCAA basketball tournament, in which favorites covered in a greater percentage than historically.
Hession said customers are attracted to the parlay and cashout options.
