Caesars Entertainment told a Wall Street analyst at G2E that they expect improvement on the Las Vegas Strip during the fourth quarter and in 2026.
Daniel Politzer with J.P. Morgan said his team met with Caesars management during investor meetings and learned that Las Vegas trends have been largely as expected, with a soft summer and lower occupancy, while gaming revenue held up. The upcoming fourth quarter and first quarter of 2026 should be better on a year-over-year basis than the just-ended third quarter, with higher group mix and rate compression.
“Trends have been consistent with management expectations, reflecting soft low-end leisure demand driving lower occupancy (flows through at high-rate to non-gaming) and return to normal summer seasonality,” Politzer said in a note to investors. “Despite pressure on the non-gaming side, gaming volumes have been decent on stability from Caesar’s core/database customers. Management expects trends to recover in the fourth quarter and first quarter of 2026, reflecting stronger group (group mix increases from low teens in third quarter to 16% to 17% in the fourth quarter to low 20s in first quarter of 2026, Politzer said.
“Fourth quarter cash room revenues are tracking down a couple of percentage points, but there’s a path to parity versus the fourth quarter of 2024, which is a meaningful improvement versus third quarter declines, “Politizer said. “October and November are tracking down year-over-year but December’s pacing up.”
When it comes to regional properties, Caesars has seen success deploying promos to drive gaming revenue and may roll out more promotions, even in markets that don’t have new supply.
“Caesars noted strong trends have held up, and management feels good about the outlook into 2026,” Politzer said. “Caesars is having success with its increased promotional campaigns in new-supply impacted markets (Chicago and Omaha) but began testing some promos in non-impacted markets more recently as well, and is seeing strong early returns. Net, Caesars expects improvements in GGR-NGR-EBITDA flow-through during the third quarter versus the second quarter as they start to generate returns on their promos/marketing campaigns.”
While Caesars experienced an impact from unfavorable NFL outcomes in September, it’s experiencing strong growth in engagement with volumes, spend, parlay mix, and structural hold and is seeing no impact to handle from prediction market offerings, Politzer said.
“On prediction market uncertainty, Caesars thinks we are about two years away from having significant legal clarity, but does envision greater potential for states to consider online sports betting and igaming legalization to raise gaming tax revenue.”
Caesars expects to generate meaningful free-cash-flow going forward, attributable to a wind down of its recent capital expenditure cycle, digital EBITDA inflecting, and the federal tax bill benefits.
