Caesars Executives Signal Las Vegas Strip Stabilization and 2026 Growth
Caesars Entertainment executives told investors that Las Vegas is stabilizing and that momentum from a stronger fourth quarter is carrying into 2026.
LISTEN TO THIS ARTICLE:Caesars chief executive Tom Reeg said Tuesday the Las Vegas Strip is not in crisis despite a pullback in leisure travel last year, and that the company recorded one of its top-four fourth-quarter performances in its history. Reeg framed 2025 visitor declines as cyclical rather than structural, noting a 7.5 percent drop in overall visitation and a fall in average daily room rates of about 9 percent in the final quarter of the year.
Occupancy across Las Vegas during the last three months of 2025 averaged 92 percent compared with 96.5 percent a year earlier. Reeg said the softness was concentrated in leisure travel, particularly drive-in traffic from California and fewer visitors from Canada, while group and convention business helped offset the decline and strengthened results late in the year.
Caesars president and chief operating officer Anthony Carano reported company-wide net revenues grew 4 percent in the fourth quarter and adjusted earnings rose 2 percent, with operating margins in the mid-40s. Carano highlighted an elevated group and convention mix during the quarter, which represented roughly 17 percent of room nights and underpinned stronger event-driven performance, including record crowds around the Formula One race and a robust New Year period.
Reeg said Caesars is seeing the Q4 uplift continue into the first quarter of 2026 and expects group business to gain further traction in the spring and summer. The one uncertainty he singled out is leisure travel for the summer months, which was the source of weakness in 2025 and could determine how quickly the market returns to prior peak levels.
The company also flagged a number of regional and capital projects tied to its outlook for the year. Caesars expects improvement in Reno driven by a stepped-up group calendar and the completion of a roughly $200 million lakefront renovation at its Lake Tahoe property. Harrah’s Oklahoma is slated to open to the public on April 9, contributing to the company’s regional footprint.
Related: Truist Warns Las Vegas Strip Recovery Remains Uncertain
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Regulatory and Market Risks
On the regulatory front, Reeg addressed the emergence of prediction markets and the uncertain legal landscape surrounding them. He described prediction markets as gambling that will take time to be sorted through state regulators, the courts and Congress, and said Caesars will avoid participating in jurisdictions where engaging could imperil its regulated casino licenses.
Reeg noted that Caesars has seen growth in digital handle in the fourth quarter with no observable impact from prediction markets in regulated states so far, but warned the company will not pursue offerings that could put its brick-and-mortar licenses at risk until there is clear legal and regulatory certainty.
The CEO also pointed to operational pressures unrelated to demand, including staffing challenges that stem from volatile week-to-week occupancy swings. Properties may fall into the low 80s percent occupancy one week and surge to full houses during a major event the next, complicating labor planning and costs for operators across the Strip.
An industry analyst with long experience covering casino markets said the pattern Caesars described is typical of a market driven by blockbuster events and convention calendars rather than steady leisure recovery, and that the timing of major sporting and entertainment events will likely continue to dictate headline performance metrics through 2026.
For investors and market watchers, the key questions are whether leisure visitation rebounds this summer and how state and federal regulators resolve the legal status of prediction markets. Caesars executives expressed cautious optimism, stressing that the Strip’s core demand drivers remain intact and that group business and marquee events are supporting a path back to historical occupancy and rate levels.
Additional detail on the company’s regional prospects and event calendar suggests Caesars is positioning capital and marketing resources to capitalize on conventions, sports-driven travel and targeted property renovations as it moves through 2026.
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