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Good day, and thank you for standing by. Welcome to the Caesars Entertainment Inc. twenty twenty-six first quarter earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone.

You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Brian Agnew, Senior Vice President of Corporate Finance, Treasury, and Investor Relations. Please go ahead.

Thank you, Daniel, and good afternoon to everyone on the call. Welcome to our conference call to discuss our first quarter 2026 earnings. This afternoon, we issued a press release announcing our financial results for the period ended March 31, 2026. A copy of the press release and our investor presentation are available in the investor relations section of our website at investor.caesars.com.

As usual, joining me on the call today are Tom Reeg, our CEO, Anthony Carano, our President and Chief Operating Officer, Bret Yunker, our Chief Financial Officer, Eric Hession, President, Caesars Sports and Online, and Charise Crumbley, Investor Relations. Before I turn the call over to Anthony, I would like to remind you that during today's conference call, we may make certain forward-looking statements under Safe Harbor federal securities laws. These statements may or may not come true.

Also, during today's call, the company may discuss certain Non-GAAP financial measures as defined by SEC Regulation G. Please visit our press releases located on our investor relations website for a reconciliation of the differences between each Non-GAAP financial measure and the comparable GAAP financial measure. Finally, Caesars Entertainment, as a matter of policy, does not comment on market rumors or speculation and will not be answering any questions during Q&A today on this topic. Over to Anthony.

Thank you, Brian, good afternoon to everyone on the call. Caesars delivered solid results for the first quarter of 2026 as consolidated net revenues of $2.9 billion increased $77 million or 3% year-over-year. Adjusted EBITDA of $887 million improved by $3 million over the prior year.

Highlights for the quarter include continued sequential improvements in operating trends in Las Vegas, revenue and EBITDA growth in the regional segment after excluding the impact of the Super Bowl in New Orleans last year, and record Q1 revenues and EBITDA in our digital segment. Starting in Las Vegas, the company delivered adjusted EBITDA of $426 million versus $433 million last year on flat revenues.

We experienced a significant sequential improvement in the hospitality vertical in Q1 with occupancy of 95.3% in the quarter and year-over-year ADR growth of 1%. This marks a dramatic improvement versus the second half of 2025. Occupancy and rate trends benefited from a strong group and convention lineup, with group occupied room mix of 19% during the quarter.

While leisure trends were still down on a year-over-year basis, they improved versus the second half of 2025. We remain focused on elevating our product offerings in Las Vegas. Our newly renovated villas at Caesars Palace, guest room product, and casino floor remodels continue to generate excellent feedback from our guests. Looking ahead, we are excited for the opening of OMNIA Dayclub at Caesars Palace on May 15th.

The full remodel of the Augustus Tower at Caesars Palace, slated for completion by early 2027, and the opening of Category 10 by Luke Combs at Flamingo later this year. For the remainder of 2026, we continue to forecast sequential improvement in Las Vegas operating trends, driven by strong group and convention mix and stabilizing leisure trends.

Moving to our regional segment, the company reported net revenues of $1.4 billion, a 3% increase year-over-year, and adjusted EBITDA of $435 million, down $5 million from the prior year. The regional segment delivered improved EBITDA results versus last year after excluding the benefits of the Super Bowl in New Orleans last year. Our targeted marketing reinvestment strategy within our regional segment continues to deliver positive results, driving increases in rate of play in Q1.

On March 3, we closed on the acquisition of Caesars Windsor. Results of Caesars Windsor are now included in our regional segment. Additionally, on April 9, we opened our newest managed property, Harrah's Oklahoma, which expands Caesars Rewards to a new market.

As we look ahead to 2026 in our regional segment, we expect to benefit from a strong group mix in Reno, the inclusion of Caesars Windsor, the completion of our $200 million Tahoe master plan renovation this summer, hosting of select property events around the World Cup, and continued return on investment on recent strategic marketing reinvestment.

With the completion of our Tahoe master plan scheduled in June 2026, we will have successfully completed all major large planned regional CapEx projects since the completion of the merger back in 2020. In total, we have invested over $3 billion in CapEx into our regional portfolio over the last five years. Our regional portfolio is positioned to benefit from these investments moving forward.

I want to thank all of our team members for their hard work this quarter. Their dedication to exceptional guest service continues to be the driving force behind our company's achievements. With that, I will now turn the call over to Eric for some insights into the first quarter performance of our digital segment.

Thanks, Anthony. Caesars Digital delivered record first quarter net revenue and adjusted EBITDA of $374 million and $69 million respectively. Flow-through during the quarter was strong at just over 66%, and EBITDA margins expanded 566 basis points to 18.4%. Our results were driven by the following underlying KPIs during the quarter.

On the sports side, net revenue was up 9%. Total volume declined 3%, with mobile sports volume declining 1%, with the declines more than offset by hold, which increased 100 basis points to 8.3%. In addition, parlay mix, average legs per parlay, and cash out mix all increased versus the prior year period. In iCasino, we delivered 18% net revenue growth, driven by strength in volume and average monthly active users.

We continued to elevate our product offering during the quarter to include new in-house games, improved bonusing capability, and incented cross-play with brick-and-mortar through our Remote Reels, exclusive product launches, and customer events. Overall, in Q1, our total monthly unique players increased approximately 2% to 512,000, and average revenue per monthly player was up 15% to $219.

From a tech perspective, we continue to convert new jurisdictions to our universal wallet and proprietary player account management system, which is now live in 27 jurisdictions and should be live in all jurisdictions by the end of April this year. As we look ahead, I'm pleased with the significant progress on the technology side of the business that's driving net revenue growth in both sports and iCasino. The continuous progress we're making is showing up in our consolidated digital top-line results.

The revenue growth, combined with our efficient customer acquisition spend and our focus on operational excellence, drives solid flow-through to EBITDA. We continue to see a business capable of achieving 20% top-line revenue growth with 50% flow-through to EBITDA, which keeps us on track to achieve our long-term financial goals. I'll now pass the call over to Bret for some comments on the balance sheet.

Thanks, Eric Hession. As Anthony Carano mentioned, on March 3rd, we acquired the operations of Caesars Windsor for $54 million and entered into a 20-year operating agreement with the Ontario Lottery and Gaming Corporation. We are excited to add Caesars Windsor to our regional portfolio.

Our first quarter consolidated results demonstrated the stability of our Las Vegas and regional segments and the continued growth in Caesars Digital. We expect to deliver strong free cash flow in 2026 during the balance of the year as a result of continued operating momentum, lower cash interest expense, and lower CapEx. Over to Tom Reeg.

Thanks, Bret, and thanks, everybody, for joining. Happy with the start to the year. Strong quarter for us. Vegas is obviously in a much healthier spot than it was kind of middle of last year, starting in the summer. Still a tale of a very, very strong market when big events and groups are in town, and softness when that isn't the case.

Can I tell you, the CONAG week here was spectacular across the market. Have talked to our peers that saw the same. You know, that's really a spectacular event, and those types of groups, the entire city gets to participate, so we love those weeks, and we want to find more of them. We're working with the LVCVA to find more prospects that look like that.

As we look into second quarter, when we met on our last earnings call, I told you I'd expect second quarter to be up slightly year-over-year. I tell you, April was a little softer than we anticipated, largely because we didn't hold like we did last year. I'd say we'll still likely be just short of last year, but again, much healthier than it's been.

Then we cycle into comps versus last summer. As everybody remembers, that was a tough summer in Vegas. Vegas is, the FIT business continues to improve. You know, our bookings feel good. It just feels like a healthier market than it did, say, 10 months ago for us, so we feel good there. Regionals, if you recall, last year, we had the Super Bowl in New Orleans.

That was a little over $10 million of incremental EBITDA. That obviously didn't repeat with Super Bowl not in one of our regional markets. Absent that, regionals had a growing quarter, are off to a very strong start in April, so we feel good about regionals the rest of the year. As Anthony said, our Tahoe redevelopment will be complete by the beginning of the third quarter.

It's less disruptive than it was last year. Right now, we have the largest group of bowlers. Recall that's a three-year cycle, with this year being the largest. Group business sets up well in regional. We feel very good about regional. Eric talked about digital highlights. Pleased with that quarter. I know others have pointed to prediction markets as an impact on customer acquisition costs.

Recall that the bulk of our customer acquisition comes from our Caesars Rewards Database, that's a particular advantage now. We're not swimming in those same pools where prediction markets are making acquisition costs higher. You can see in our numbers we had a very strong quarter, and we're off to a good start in second quarter as well.

Remember that we have some significant partnership expenses that roll off in 2026. The bulk of those benefits will flow to us in the third and fourth quarter of this year then into the first quarter of 2027. Digital looks very strong. We're still on the path that we laid out a long time ago toward $500 million or more of EBITDA. You know, with the completion of our capital cycle, we're in a free cash flow harvesting stage now.

You've seen our capital expenditures come down. We have been balanced between buying back stock and paying down debt. You'll see in the first quarter we didn't buy back stock. First quarter for us is a heavy cash outflow quarter with our bonus payments, interest payments, and in this year's quarter, we spent the $50 million plus to buy out the Windsor contract. You should expect as we move forward through the year, through our heavy free cash flow quarters, second through fourth, that we'd be back to a balance between debt pay down and stock repurchase. With that, I'll open up the floor to questions.

As a reminder if you want to ask a question please press *one one on your telephone and wait for your name to be announced to withdraw your question please press * one one again, please stand by while we compile our Q&A roster. Our first question comes from Dan Politzer with JP Morgan. Your line is open.

Hey, good afternoon, everyone. Thanks for the questions. First, I wanted to talk about Las Vegas a bit. Tom, you said the market feels a bit healthier than maybe 10 months ago. Can you maybe talk about what specifically you're seeing? If there are signs of stabilization in that leisure category, midweek, weekend, high-end, low-end? Just kind of parse out the market a bit in more detail.

I'd say leisure market has continued to get healthier from the kind of the lows of last summer. You know, we'd expect to see back to typical Vegas seasonality as we get into the hot months. That leisure customer does feel, you know, a little bit firmer than it did, you know, kind of each quarter since third quarter of last year.

As I said, it's a tale of weekends, weeks when the market has significant group events, significant sporting events, significant attractions. Those are exceedingly strong, we still do have weeks that are soft. We had weeks in April that were soft, where we just didn't have a great calendar in the market. Group business this year should be another record for us on top of last year's record. We're excited, in May, the State Farm conference comes back.

For us, that'll be a nice lift for us. You know, we feel better each quarter about, you know, how Vegas is performing. I think, you know, there's a downdraft that, you know, we're trying to catch up to or in the rear view mirror. I think it should be pretty stable going forward. In terms of, you know, high end versus low end, I think it's as I've said before, I think center strip in general has held up the best.

You know, either end of the strip has held up less well. High end has held up better than low end. You know, center strip has kind of trumped high end versus low end. We don't have a big bifurcation between, you know, say, Caesars Palace and Harrah's in terms of performance. It's all fairly uniform for us.

Got it. Thanks, thanks for all the detail. More of a kind of high-level one. Certainly you said you're going to be back in the market, you know, on share repurchases in the coming quarters. As you guys think high level, you know, philosophically about the value of the equity, can you just remind me or remind us of how you think about the proposition there? What you think public equity investors are missing or overlooking as it comes to stock valuation, as you think about going back into the open market?

I mean, we're looking at, you know, the returns we can get through buying our stock. There's obviously a free cash yield associated with that. Paying down debt. We are still more levered than would be our preference. There's, you know, a continuing and active desire to delever.

We have, you know, returns on growth capital projects. As free cash flow comes in, we decide, you know, which is the most attractive use of that cash flow. As has been the case in the last, you know, year or so, the answer has typically been some mix of share repurchase and debt repayment. That's what we'd expect going forward.

Got it. Thanks so much.

Thank you. Our next question comes from Brandt Montour with Barclays. Your line is open.

Hello, everybody. Good afternoon, and thanks for taking the question. Maybe starting with regional, Tom, I was wondering if you could give us some comments on that customer and how they're sort of faring in this environment with slightly higher gas prices. Obviously, we have stimulus that started coming in better, but you know, the March data industry-wide did seem to slow. I know there were some calendar issues, but just sort of how do those sort of gives and takes sort of net out for you guys and what you're seeing on the ground?

I would say the consumer in general, but particularly the regional consumer, has been remarkably resilient through the noise that we've seen in the last couple of months. Regional business in general feels firm. We feel very good about what we're seeing there and what we see going forward. We do have some idiosyncratic stuff in Northern Nevada in particular that's a tailwind for us. You know, across the board, regionals feel pretty good for us.

Okay. Great. Thanks for that. Then maybe for Eric, you said, Eric, that the digital business is still capable of doing 20% top line. You guys reported in top line in the low teens in the first quarter, but you know, you gain share and sort of beat the industry on the iGaming side. How do you get back to that 20% overall net revenue in the current environment?

Yeah, I think, you know, the first quarter, our sports volumes, being down 1% was lower than we would expect for the long term. I think, you know, just annualizing some of the effects from last year with the Super Bowl being in New Orleans and the teams maybe being not as exciting for people for the Super Bowl, caused some of that.

In addition, the high hold increases offset some of the handle growth. I think if you have mid-single digits handle growth and then the iCasino side continuing to grow like it is, that's how we can get to that 20% range. You know, as you saw, we grew a, you know, much faster than the 50% from a flow-through perspective.

Some months and quarters will have flow-through that's gonna be, you know, higher like we did this quarter. You know, we don't need to get that 20% revenue growth to get the bottom line growth that we're targeting.

Great. Thanks, everyone.

Thank you. Our next question comes from Lizzie Dove with Goldman Sachs. Your line is open.

Hi. Thanks for taking the question. Just kind of back to Vegas for a second. You know, there was a lot of talk last year about bringing value back to Vegas and, you know, we've seen one of your peers bring out these, you know, all-inclusive packages and whatnot to kind of stimulate that leisure consumer. I'm curious where you are in that kind of process of, you know, any kind of pricing changes or how you think about that in terms of bringing back the leisure consumer more in the remainder of the year.

The team's doing a great job here in Vegas, looking at all of our properties and welcoming guests at every price point. We've got the all you can eat and drink at a number of our properties on the east side. We've taken a look at price up and down all of our properties, and I think we're in a pretty good spot to attract every guest to Las Vegas.

Lizzie, keep in mind, I know that narrative has been out there quite a while. We were over 95% occupancy this quarter, so we feel very good about where we are in terms of price value.

Got it. Got it. Just on the regional side, you know, you're kinda lapping some one-timers in two Q, and, you know, you've got some of these renovations you mentioned with Tahoe and whatnot kinda coming online. Any way to think about that, at least sizing some of these impacts from these renovations that you've been doing and how much that can benefit the remainder of the year?

Yeah. I'd rather not get that granular on a per property basis, but I would say I'd expect regional to be a healthy grower the rest of the year and, you know, second quarter is off to a good start.

Thank you.

Thank you. Our next question comes from Barry Jonas with Truist. Your line is open.

I just wanted to dig into that all-inclusive package a little bit more. You recently started out at some of your lower-end properties. I guess, what are your expectations there? You know, should we think of it as sort of a break-even proposition, but hopefully you'll get upside from gaming? Just curious to dig in on that a little more.

Yeah. We're not pricing anything to break even, Barry. We're looking to be profitable in everything that we do. You know, we know what each room in the portfolio, all 20,000 of them, we would expect, you know, when you're filled, how much that generates in revenue, regardless of what they paid to get in the door.

You should think of this as, you know, when you're in your softer, you know, your softer periods where there's not significant group lift, that this is a way to bring in people profitably that you shouldn't view them as, you know, a loss leader or even a break-even proposition for us.

Great. That's helpful. Just for a follow-up, you know, curious if there's been any progress made in looking for some sort of solution to the VICI lease coverage issues you've talked about in the past. Thank you.

Yeah, appreciate the question. As I said last quarter, I don't wanna be providing a blow-by-blow every 90 days about talks that may or may not be happening between us and VICI. Everybody's well aware of where that lease sits. When the two of us have something to report, I'll come back to you. I'm not gonna keep updating every quarter. I understand and appreciate the question, Barry.

Fair enough. Thank you, Tom.

Thank you. Our next question comes from David Katz with Jefferies. Your line is open.

Sorry, just get myself unmuted. Thanks for taking my question. You've talked about this a little bit, but I wanted to just go at it in a slightly different angle. Within, you know, the regional gaming, you know, it's obvious the opportunities you have, you know, where you've deployed some capital. There have been a handful of properties that have seen some competition. How have you evolved and deployed your strategies, you know, to compete, you know, specifically in those markets where there's been some head-on competition?

We start with service, David, providing the best service in the industry. We've got Caesars Rewards, which we think is our largest acquisition and retention tool. As we've spoken to over the past few quarters, we've tweaked our marketing reinvestment, especially at competitive properties, to become more competitive.

We've ramped that down quarter by quarter over the past four quarters and to get more efficient. The teams have done a fantastic job in our competitive markets, retaining our customers, delivering them excellent service and giving them reasons to come visit a Caesars property versus one of the new competitors.

Understood. You know, I know the mantra is sort of ramping down CapEx, but are there, you know, any singles and doubles, you know, type projects that may be out there in the regions, you know, to think about in the future and, you know, how might we reflect those?

Yeah, David, we're over $3 billion of capital in the last five years into the regional markets. You know, the bulk of that into the properties that generate 80%+ of our regional EBITDA. You know, if there, if there's a thought that there's deferred capital out there in our portfolio, that's, that doesn't reflect what you see on the ground and what you see in the investments that we've made in the last five years.

There is no, you know, big group of projects around the corner. This is normal capital cycle stuff. As you come off a large capital expenditure program that's as broad-based as ours was, it's natural that you then spend some time, you know, harvesting that cash flow and then deciding what your next wave would be. That's, you know, a couple of years away at a minimum at this point.

Fair enough. Thank you. Appreciate it.

Thank you. Our next question comes from John DeCree with CBRE Capital Advisors. Your line is open.

Hi, guys. I wanted to ask a question about Caesars Rewards. I think earlier in the call, you mentioned it's one of your primary customer acquisition channels for your online business. I think it was relative to sports, but I assume the same for iCasino. Tom or Eric, can you tell us kind of where you are in terms of the penetration of that database as we think about kind of the growth targets going forward? Is there, you know, a lot more customer activation ahead? Is it more about, you know, just getting greater monetization from customers in the database? If you could elaborate, that'd be helpful.

Yeah. I would say that, you know, we continue to get better, there's still a gigantic opportunity in converting customers in our database that are primarily brick and mortar with us and play digitally elsewhere and bringing them into the fold. You know, when we first launched our app on the sports side and frankly on the iCasino side before Caesars Palace Online, the experience lagged our peers.

That's no longer the case. It's, you know, going to those customers to get another look. What we find is, you know, brick and mortar customer that shows up in digital for us increases their brick and mortar spend with us. I don't think that's because they gamble more. I think it's because they're consolidating wallet share, and that's true of across the Caesars Rewards database.

The more places we touch you, whether that's physical and digital. Whether that's multiple properties within a market or that's multiple properties across markets. The more times we touch you, the more valuable you become as a customer for us. That's a system-wide focus and effort. You'll see us in Vegas starting to talk to customers about, you know, the Caesars campus and all the things that you can do.

You'll check into our property, and we'll be giving you information that shows all the places you can use your Caesars Rewards outside of the building that you're staying in. We're leaning into that. We're doing more in digital, and it continues to get better, that's an enormous opportunity for our digital business as we move forward and certainly as new states come online.

Thanks, Tom. That's helpful. My follow-up will be right down the same path. You've talked about paying down debt, buying back stock, but, you know, at least once a year, I ask you about M&A. You obviously, you know, I think Caesars Windsor was a unique situation, but, you know, are there markets where you would expand your reach, Canada, U.S., regionals, where it would make sense to grow your Caesars Rewards databases? Are there still, you know, enough synergy? Have you contemplated or think about M&A at this point at all in terms of expanding the network?

John, as you know, we're, you know, we're always willing to look. I would say that purchasing an asset or portfolio of assets in the near term for us is unlikely given, you know, the yield that we can find in our own stock, which, you know, there's far more certainty in that number than what you'd model in an acquisition. Unlikely we'd be a significant buyer going forward. As you know, that can change depending on the opportunity that's in front of you.

Fair enough. Appreciate the comments, Tom. Thank you.

Thank you. Our next question comes from Steven Wieczynski with Stifel. Your line is open.

Hey, guys. Good afternoon. Tom, you think about the rest of the year in Vegas. Obviously, comps are going to get easier in the back half, and your comments that the FIT bookings look solid are, I mean, obviously are pretty encouraging at this point.

I guess the question is around, you know, with the FIT business still probably booking more close in at this point, how do you weigh, you know, those solid bookings now versus, you know, let's say gas, fuel prices stay relatively elevated for an extended period of time and what that can mean, you know, in terms of drive-in traffic or even, you know, wallet spend as folks, you know, enter Vegas? I guess maybe help us think about the sensitivity that you've seen there in the past.

I would say correlation between gas prices and spend in our portfolio is not particularly high. you know, our average customer typically is a level of income and worth that doesn't become a significant factor in their decision. Obviously, as you can certainly get to a level or extended a period of time where that may change. really, you know, as long as real estate values and the employment picture are solid, you know, our business has typically performed pretty well, and I'd expect that to continue to be the case.

Okay. Gotcha. Sticking with Vegas, Tom, you know, you talked about the 95% occupancy rate in Vegas this past quarter. You know, is there any way to help us think about how much of that 95% was incentivized? Meaning, you know, did you guys have to promote more or do any more discounting in order to get that level of occupancy?

No, there was no meaningful shift in casino rooms. The shift you would have seen was more group business first quarter this year than last year, which crowded out some OTA business.

Okay. Gotcha. Thanks, guys. Appreciate it.

Thank you. Our next question comes from Stephen Grambling with Morgan Stanley. Your line is open.

Hey, thank you. One more on Vegas. Just given all the, you know, talk about attracting more big conventions like CONEXPO-CON/AGG, seemed like there was a window coming out of the pandemic where, seemed like Vegas was taking share from other markets given The Sphere, Allegiant expanded its convention center. What are you hearing from meeting planners or the convention community on what the competitive environment for that business looks like, and what really moves the needle to get some of these to come to Vegas?

Yeah, there's a lot that goes into that. You know, I tell you, for the types of conferences that we're talking about, it's super competitive, and that's been the case for, you know, regardless of the pandemic, you know, before or after. We're talking about very lucrative conferences. You know, everybody's kind of on the same footing as they were prior.

There's really no jurisdiction anymore that's not recovered and competitive the way they were in the past. We, you know, as a market, provide a very compelling, particularly in the group side, you know, this is what gets lost in that value discussion. On the group side, we provide a very compelling value trade. You know, this is a very easy city to get around for your group.

There's an unusually broad spectrum of, you know, attractions in the market, entertainment, restaurants, shopping, golf, that all feed into that. You know, then there, it, there's political elements that come in in some of these things. There's just a lot of different levers, and it's unique for each group, you know.

For us, what we want and what we want the market to focus on is those events like CONAG that lift all boats. You know, are not necessarily the highest profile. You're not gonna be, you know, in a magazine because you got a great, you know, a great trade show or a conference versus some of the more high-profile stuff we've done. Those things, the meat and potatoes of that group business is really what drives the whole city.

You know, I'm sure I know you talk to everyone in town. CONEXPO-CON/AGG Week, there was not an unhappy operator in this town. The more weeks we can fill like that during the year, you know, these this is elephant hunting as a market that you're going after. If you can find even another one or two or three, it moves the needle for everybody. That's what we're hoping, you know, we can deliver as, you know, time goes by.

Got it. Just to clarify, it sounds it's less about really changing anything, CapEx or pricing, something like that. It's about telling the story.

That's right.

Then maybe one unrelated follow-up on digital regarding the higher customer acquisition costs. It seems like we entered a window where there's not as many new states, and handle and MUPs have been slower in OSB. With that in mind, should we be thinking about the higher customer acquisition cost impact as really more about replacing churn in the existing base, or are you still finding opportunities to acquire customers?

We find opportunities to acquire customers, you know, the chief opportunity for us, as we've talked about, is our database. As you know, we've been, you know what? A third to a half of the promo intensity of our peers. You know, our share has been fairly sticky. It's been growing in iCasino.

You know, what that tells me is we have lower acquisition cost and lower churn than our peers. You know, that's been a significant benefit to us, particularly recently. As you've seen others start to talk about customer acquisition costs, ours have been pretty steady.

Got it. Thank you. That's helpful.

Thank you. Our next question comes from Shaun Kelley with Bank of America. Your line is open.

Hi, good afternoon, everybody. Thanks for taking my question. Maybe to start, while we were talking digital for a minute, going back to Eric. Just curious on a little bit more color around the iGaming trends you're seeing. Obviously, it's a important growth driver for you. The NGR side sounds super encouraging.

Just digging in a little bit more, when we looked at some of the market-wide handle growth, and then even, you know, kind of net of hold a little bit on the GGR side, it did feel like we saw that slow a bit in Q1. I think a lot of it might have had to do with just slower OSB trends and cross-sell. Just wondering if you could unpack a little bit about what you saw in the market and specifically, are you seeing some competition pick up in states like Michigan as well?

I would say there hasn't been a huge change, Shaun, in any direction either way. You know, our handle is up 20% year-over-year. It might be down a little bit from the prior years, also, you know, we're talking about a much larger scale. You know, as that happens, you're gonna see the percentages decline to some degree, particularly 'cause we haven't had any new states open in any, you know, in recent times here.

In terms of additional competition, there have been a few new entrants just as companies have exited the market and others have taken their place. I again would say that everything's generally been pretty consistent. We've been keeping our reinvestment levels, you know, relatively constant. You know, to Tom's point, our acquisition costs for the casino side have been kind of flat to down a little bit, so we're kind of happy with how things are going.

Super. Thanks for that. High level, Tom Reeg, earlier on, you made an interesting comment about, you're not seeing as much, if I caught it right, you're not seeing as much bifurcation between maybe high and low properties in the portfolio as maybe sort of location on the strip.

Just sort of wondering, if you could, you know, kind of expand on that as it relates to, you know, as we start to see some changes out there, maybe the opening of Hard Rock, you know, towards the latter end of next year. How do you expect that to play? Will that shift any of the center of gravity one way or the other? Just how do you expect it to impact the Caesars portfolio? Thanks.

Shaun, I expect that to be a mixed bag for us. Given what they're building and the level of investment that's going in there, I think it's pretty clear that they're going to target the highest end of the market. You know, while you've seen our regional CapEx cycle kind of move into a harvest phase, we've shifted capital toward Vegas, and we shift our Vegas capital towards Caesars Palace and Paris, which are two that get high-end business.

You know, Mirage coming offline for us was, you know, we can see things like the High Roller, the zip line, the shows on the east side of the Strip have struggled a bit without those 3,000 rooms online. That'll be a benefit to us when you have almost 4,000 rooms with the Guitar Tower feeding.

You know, obviously, we're the closest neighbor on most sides of what Hard Rock's doing. I think we'll have a benefit there. You know, we're anticipating that the high end will get even more competitive. The entertainment space will get more competitive. I'd expect the cost of the biggest acts will go up. You know, we'd expect them to be impactful.

I'd also say given the location and what they're building, we're a little more optimistic that you'll get some of the, you know, what you and I saw back in the day, where a new property opens and expands the market, visitation goes up. It's not just, you know, cutting up the pie a little smaller. I think they can grow the pie a bit. We're excited about what they're building and the fact that we're, you know, immediately adjacent to it, both on the east side and at Caesars Palace.

Great. Thank you.

Thank you. Our next question comes from Jordan Bender with Citizens. Your line is open.

Hi, everyone. Good afternoon. Thanks for the question. Maybe to follow up on the last question. Tom, you kind of just talked about maybe how Hard Rock is going to impact, like, you in the market, but specifically, like, around kind of the playbook into next year. Like, should we anticipate that you guys will have to adjust pricing or change kind of the promotional strategy in the months kind of leading into that opening?

We'll have a full strategy to combat their opening. You know, Vegas is a totally different animal than regional. Vegas is, you know, a 90%-95% cash business versus you're generating profit from every vertical, whereas regionals are gaming centric, and a lot of your non-gaming is comp-based business. You know, keeping your properties full is paramount.

We'll have a strategy to combat that opening. Realize this is a 2% lift in capacity in terms of rooms. This is not a seismic event from an occupancy perspective. It's really just keeping your best customers, you know, in your system and minimizing the loss of your most profitable customers.

Continuing to elevate the product, as Anthony Carano talked about. Full remodel of the Augustus Tower and all the new capital investments that are going into Caesars Palace ahead of the Hard Rock opening. That's really the key strategy going forward as we prepare for their opening.

Great. Thank you. Then switching to more broadly, I think you have two union contracts coming up in the next several months. Anything to call out there in terms of either getting those done or extended and any impact maybe we should be expecting on the cost side from that?

Nothing to talk about at this point. New Jersey comes up this summer. Vegas is not till 2028.

Understood. Thank you.

Thank you. Our next question comes from Chad Beynon with Macquarie. Your line is open.

Afternoon. Thanks for taking my question. Eric, wanted to ask about the Alberta launch. Anything that you can share around that? I know, you know, it's a smaller population, but some good cities in there with big hockey fans that have probably been coming to the market. How heavy are you guys thinking about leaning in there and anything around a database that you already have ahead of the iGaming launch in July? Thanks.

Yeah. I would agree with kind of everything you said. It's a good opportunity. They actually have a fairly high average wealth per person, but it is on the smaller side in terms of the size of the province. You know, that said, it's both sports and iCasino, so we're very optimistic that it'll be a great market. You know, I would say, you know, in terms of our performance in Ontario, it's kind of been middle down the road.

Here when we launch, our app is significantly improved from when it was when we launched Ontario. We'll be putting a much more comprehensive launch plan together that will really go after the sports as well as the casino market, and we'll launch with the Horseshoe and Caesars Palace brand.

It'll be a much more significant plan. You know, in terms of having a database already seeded in the market, it's not all that significant. There's just not a huge amount of travel between the different, the U.S. and Canada from that province. In addition, there are some restrictions in terms of how the data can be transferred because it is out of the country or in the country, depending on which way you're looking.

Gotcha. Thank you. Then Tom or Anthony, going back to the regional markets, revenues have been stable for several quarters. Margins have declined in the first quarter year-over-year. Obviously, the Super Bowl was a, was a major headwind, so maybe you would've been closer to growing margins. Are we at the point where, you know, all things considered that we know right now that margins could start to improve if revenues are growing in this low single-digit range that we saw in the first quarter?

Yes.

Thank you. Appreciate it.

Thank you. Our next question comes from Trey Bowers with Wells Fargo. Your line is open.

Hey, guys. Thanks for the question. Just getting back to the kind of use of cash, is there a leverage ratio that you guys target that once you achieve that, kind of all the cash flows will be used towards buyback, or not all, but the significant portion of it?

I would say it's always going to be a decision as the cashflow comes in. There's not a magic number where all of a sudden it's gonna be all share buyback. You know, we want our leverage to be sub five times on a lease-adjusted basis.

Okay, thanks. Just on the iGaming side of things, it looked like we were pretty close in Virginia. Any thoughts around just which states out there you guys feel pretty good about that might be coming into the system in the next 2 years?

Very hard to handicap, Trey. It's I wish it were the case that it were kind of incremental, like a football drive where you get to midfield one year and then field goal range the next year, and then it's done the year after that. It's more like a car accident that happens, you know, in your vicinity. This stuff comes together very quickly as states get under stress, budget-wise and are looking for revenue. You know, the Virginia situation went from wasn't really on our radar as a possibility to a week later seemed high probability and then ended up not happening.

You know, Illinois, prior to their per wager tax a couple days earlier, we were told they're gonna legalize iGaming on Saturday night, it was not even on the radar at the time as a real possibility. It's very difficult to predict. What's easy to predict is state budgets are tight and getting tighter, states are gonna be looking for avenues to raise revenue. Historically, gaming has been a place to do that.

If you look over the last couple of years, that's really only catalyzed in a way that was a headwind for us. It was tax increases or per bet taxes. The reality is those don't raise enough versus the holes they're trying to plug. What really moves the needle is legalizing OSB or iGaming. I think if you're looking over kind of an intermediate timeframe, I'm highly confident there'll be more jurisdictions available to us. I just hesitate to predict which ones those would be.

Great. Thank you.

Thank you. Our final question comes from Daniel Guglielmo with Capital One Securities. Your line is open.

Hello, everyone. Thank you for taking my question. I know it's a smaller piece of the business, but the other line, so entertainment, was there anything to call out there this quarter or throughout the year?

Sorry, Dan, it sounds like someone's hitting you with a fire hose in the middle of the question. We missed most of it.

Sorry about that. I took my headphones out. I know it's a smaller piece of the business, the other line, so entertainment and retail performed well versus last year. Was there anything to call out there this quarter, or is that an area where you can continue to improve on throughout the year?

The only thing I can think of is our show. Our entertainment calendar in Vegas is more robust than it was last year, and that will continue throughout 2026. We've got more shows both in The Colosseum and in Planet Hollywood.

Okay, great. Just as a follow-up, table game drop was down in both segments. Is that just a different mix of customers coming to the casinos, or is it more tactical on your part with maybe less offerings, higher minimums? Any color there would be helpful.

It's typically timing based in Vegas. In regionals, it's gonna be heavily skewed by Super Bowl. There was a ton of high-end business in New Orleans last year's first quarter, which didn't repeat since the game wasn't there. There's nothing in our strategy or in consumer behavior other than timing of trips that would explain that.

Great. Thank you.

Thank you. This concludes the question and answer session. I would now like to turn it back to Tom Reeg, CEO, for closing remarks.

All right. Thanks, everybody. We'll talk to you after next quarter.

This concludes today's conference call. Thank you for participating. You may now disconnect.