Caesars Entertainment Inc

Previous wording

The following discussion and analysis of the financial condition and operating results of Caesars Entertainment, Inc., a Delaware corporation, and its consolidated subsidiaries, which may be referred to as the “Company,” “CEI,” “Caesars,” “we,” “our,” or “us,” for the three and six months ended June 30, 2024 and 2023 should be read in conjunction with the unaudited consolidated condensed financial statements and the notes thereto and other financial information included elsewhere in this Form 10-Q as well as our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Annual Report”). Capitalized terms used but not defined in this Form 10-Q have the same meanings as in the 2023 Annual Report.

Current wording

The following discussion and analysis of the financial condition and operating results of Caesars Entertainment, Inc., a Delaware corporation, and its consolidated subsidiaries, which may be referred to as the “Company,” “CEI,” “Caesars,” “we,” “our,” or “us,” for the three and nine months ended September 30, 2024 and 2023 should be read in conjunction with the unaudited consolidated condensed financial statements and the notes thereto and other financial information included elsewhere in this Form 10-Q as well as our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Annual Report”). Capitalized terms used but not defined in this Form 10-Q have the same meanings as in the 2023 Annual Report.

Previous wording

We own, lease, brand or manage an aggregate of 53 domestic properties in 18 states with approximately 51,000 slot machines, video lottery terminals and e-tables, approximately 2,800 table games and approximately 44,900 hotel rooms as of June 30, 2024. In addition, we have other properties in North America that are authorized to use the brands and marks of Caesars Entertainment, Inc. Our primary source of revenue is generated by our casino properties’ gaming operations, our retail and online sports betting and online gaming, and we utilize our hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to our properties.

Current wording

We own, lease, brand or manage an aggregate of 53 domestic properties in 18 states with approximately 50,900 slot machines, video lottery terminals and e-tables, approximately 2,700 table games and approximately 44,900 hotel rooms as of September 30, 2024. In addition, we have other properties in North America that are authorized to use the brands and marks of Caesars Entertainment, Inc. Our primary source of revenue is generated by our gaming operations, our retail and online sports betting and online gaming. Additionally, we utilize our hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to our properties.

Previous wording

In 2022, we partnered with NYRABets LLC, the official online wagering platform of the New York Racing Association, Inc., and have launched the Caesars Racebook app within 21 states as of June 30, 2024. The Caesars Racebook app provides access for pari-mutuel wagering at over 300 racetracks around the world as well as livestreaming of races. Wagers placed can earn credits towards our Caesars Rewards loyalty program or points which can be redeemed for free wagering credits.

Current wording

In 2022, we partnered with NYRABets LLC, the official online wagering platform of the New York Racing Association, Inc., and have launched the Caesars Racebook app within 22 states as of September 30, 2024. The Caesars Racebook app provides access for pari-mutuel wagering at over 300 racetracks around the world as well as livestreaming of races. Wagers placed can earn credits towards our Caesars Rewards loyalty program or points which can be redeemed for free wagering credits.

Previous wording

We are also in the process of expanding our Caesars Digital footprint into other states in the near term with our Caesars Sportsbook, Caesars Racebook and iGaming mobile apps as jurisdictions legalize or provide necessary approvals. No customers under 21 years old are allowed to wager on any of our Caesars Sportsbook, Caesars Racebook and iGaming mobile apps.

Current wording

We are also in the process of expanding our Caesars Digital footprint into other states in the near term with our Caesars Sportsbook, Caesars Racebook and iGaming mobile apps as jurisdictions legalize or provide necessary approvals. No customers under 21 years old are allowed to wager on any of our Caesars Sportsbook, Caesars Racebook or iGaming mobile apps.

Previous wording

We have contributed a total of $7 million in cash and approximately 209 acres of land with a total fair value of $69 million. We have no further obligation to contribute additional real estate or cash. During the year ended December 31, 2023, we recorded $64 million of income related to the investment, primarily due to the joint venture’s gain on the sale of a land parcel. As of both June 30, 2024 and December 31, 2023, our investment in the joint venture was $147 million and is recorded in Investments in and advances to unconsolidated affiliates on the Balance Sheets.

Current wording

Since inception of the joint venture, we have contributed a total of $7 million in cash and approximately 209 acres of land with a total fair value of $69 million. We have no further obligation to contribute additional real estate or cash. During the year ended December 31, 2023, we recorded $64 million of income related to the investment, primarily due to the joint venture’s gain on the sale of a land parcel. During the three months ended September 30, 2024, we received distributions of $39 million and recorded $11 million of income related to our investment due to the joint venture’s gain on the sale of a land parcel. As of September 30, 2024 and December 31, 2023, our investment in the joint venture was $119 million and $147 million, respectively, and is recorded in Investments in and advances to unconsolidated affiliates on the Balance Sheets.

Previous wording

Key performance metrics include volume indicators such as drop or handle, which refer to amounts wagered by our customers. The amount of volume we retain, which is not fully controllable by us, is recognized as casino revenues and is referred to as our win or hold. Slot win percentage is typically in the range of approximately 9% to 11% of slot handle for both the Las Vegas and Regional segments. Table games hold percentage is typically in the range of approximately 16% to 23% of table games drop in both the Las Vegas and Regional segments. Sports betting hold is typically in the range of 5% to 10% and iGaming hold typically ranges from 3% to 5%. In addition, hotel occupancy, which is the average percentage of available hotel rooms occupied during a period, is a key indicator for our hotel business in the Las Vegas segment. See “Results of Operations” section below. Complimentary and discounted rooms are treated as occupied rooms in our calculation of hotel occupancy. The key metrics we utilize to measure our profitability and performance are Adjusted EBITDA and Adjusted EBITDA margin.

Current wording

Key performance metrics include volume indicators such as drop or handle, which refer to amounts wagered by our customers. The amount of volume we retain, which is not fully controllable by us, is recognized as casino revenues and is referred to as our win or hold. Slot win percentage is typically in the range of approximately 9% to 11% of slot handle for both the Las Vegas and Regional segments. Table games hold percentage is typically in the range of approximately 16% to 23% of table games drop in both the Las Vegas and Regional segments. Sports betting hold is typically in the range of 7% to 11% and iGaming hold typically ranges from 3% to 5%. In addition, hotel occupancy, which is the average percentage of available hotel rooms occupied during a period, is a key indicator for our hotel business in the Las Vegas segment. See “Results of Operations” section below. Complimentary and discounted rooms are treated as occupied rooms in our calculation of hotel occupancy. The key metrics we utilize to measure our profitability and performance are Adjusted EBITDA and Adjusted EBITDA margin.

Previous wording

The following summary highlights the significant factors impacting our financial results for the three and six months ended June 30, 2024 and 2023:

Current wording

The following summary highlights the significant factors impacting our financial results for the three and nine months ended September 30, 2024 and 2023:

Previous wording

•Caesars Sportsbook, Caesars Racebook and iGaming mobile apps – We continue to launch Caesars Sportsbook and Caesars Racebook in new jurisdictions, and our online and mobile iGaming application, Caesars Palace Online Casino, launched in the summer of 2023. As new states and jurisdictions have legalized sports betting, we have made varying degrees of upfront investments which have been executed through marketing campaigns and promotional incentives to acquire new customers and establish our presence in the new state or jurisdiction. We adjust our level of investment during the launch period in new jurisdictions based, in part, on prior experience and do not expect such investment to continue at elevated levels subsequent to the initial launch periods. Furthermore, on June 18, 2024, we completed the acquisition of the operations of WynnBET’s Michigan iGaming business and long-term extension of iGaming market access rights with the Sault Ste. Marie Tribe of Chippewa Indians.

Current wording

•Caesars Sportsbook, Caesars Racebook and iGaming mobile apps – We continue to launch Caesars Sportsbook and Caesars Racebook in new jurisdictions, as well as our online and mobile iGaming applications. Caesars Palace Online Casino launched in August 2023 and Horseshoe Online Casino has initially launched in October 2024 in Michigan, with plans to expand into other jurisdictions where Caesars Digital iGaming platforms are live. As new states and jurisdictions have legalized sports betting, we have made varying degrees of upfront investments which have been executed through marketing campaigns and promotional incentives to acquire new customers and establish our presence in the new state or jurisdiction. We adjust our level of investment during the launch period in new jurisdictions based, in part, on prior experience and do not expect such investment to continue at elevated levels subsequent to the initial launch periods.

Previous wording

•Debt Transactions – During thesix months ended June 30, 2024 and 2023, we refinanced $4.4 billion of debt in both periods. In April 2024, Caesars Virginia, LLC entered into a new $425 million Caesars Virginia Delayed Draw Term Loan and Revolving Credit Facility and utilized$120 million as of June 30, 2024. In addition, we amended the CEI Credit Agreement andreduced the interest rate margin on the CEI Term Loan B in May 2024. Wemade a voluntary principal repayment of $100 million onour CEI Term Loan B in June 2024. See Liquidity and Capital Resources below for more detail related to 2024 transactions. As a result of these transactions, we recorded loss on early extinguishment of debt on the Statements of Operations of $3 million for the three months ended June 30, 2024 and $51 million and $197 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

•Debt Transactions – In April 2024, Caesars Virginia, LLC entered into a $425 million Caesars Virginia Delayed Draw Term Loan and Revolving Credit Facility and has utilized$210 million of the Caesars Virginia Delayed Draw Term Loanas of September 30, 2024. During thenine months ended September 30, 2024 and 2023, we refinanced $4.4 billion of debt in both periods. In addition, in May 2024 we amended the CEI Credit Agreement andreduced the interest rate margin on the CEI Term Loan B and in June 2024 wemade a voluntary principal repayment of $100 million onthe CEI Term Loan B. We recorded losses on the early extinguishment of debt on the Statements of Operations of $3 million for the three months ended September 30, 2023 and $51 million and $200 million for the nine months ended September 30, 2024 and 2023, respectively. Subsequent to September 30, 2024, we issued $1.1 billion aggregate principal amount of 6.00% Senior Notes due 2032 (the “CEI Senior Notes due 2032”) and utilized the proceeds to redeem approximately $1.1 billion of the CEI Senior Notes due 2027. See Liquidity and Capital Resources below for more detail related to 2024 transactions.

Previous wording

•Impairment Charges – Primarily due to localized competition within certain markets in the Regional segment, resulting in decreased projected future cash flows at certain properties, the Company recognized impairments of certain intangible assets. The Company identified trademarks, gaming rights and goodwill at three reporting units with estimated fair values below their respective carrying values. During the three and six months ended June 30, 2024, the Company recognized impairment charges totaling $118 million. During the three and six months ended June 30, 2023, the Company did not realize an impairment.

Current wording

•Impairment Charges – Primarily due to localized competition within certain markets in the Regional segment, resulting in decreased projected future cash flows at certain properties, the Company recognized impairments of certain intangible assets during the second quarter of 2024. The Company identified trademarks, gaming rights and goodwill at three reporting units with estimated fair values below their respective carrying values. During the nine months ended September 30, 2024, the Company recognized impairment charges totaling $118 million. During the nine months ended September 30, 2023, the Company did not recognize an impairment.

Previous wording

(b)See the “Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the three and six months ended June 30, 2024 and 2023” discussion later in this MD&A for a definition of Adjusted EBITDA and a reconciliation of net income (loss) to Adjusted EBITDA.

Current wording

(b)See the “Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the three and nine months ended September 30, 2024 and 2023” discussion later in this MD&A for a definition of Adjusted EBITDA and a reconciliation of net income (loss) to Adjusted EBITDA.

Previous wording

Consolidated comparison of the three and six months ended June 30, 2024 and 2023

Current wording

Consolidated comparison of the three and nine months ended September 30, 2024 and 2023

Previous wording

Consolidated net revenues decreased for the six months ended June 30, 2024, as compared to the same prior year period, due to a decline in casino revenues in our Las Vegas segment primarily driven by the decrease in gaming volume associated with the divestiture of Rio at the end of the third quarter of 2023. The Regional segment was negatively impacted by inclement weather in several of our property locations during the first quarter of 2024, the continued impact of competition associated with new casino resorts opening in some of our regional markets, and construction disruption from renovation projects at certain of our properties during the first half of 2024. These results were partially offset by net revenues generated from the opening of our temporary gaming facilities at Caesars Virginia and Harrah’s Columbus Nebraska during the second quarter of 2023, followed by the permanent facility of Harrah’s Columbus Nebraska in May 2024. Furthermore, Caesars Digital delivered strong revenue growth driven by higher hold in sports betting and a significant increase in iGaming volumes coupled with improved hold.

Current wording

Consolidated net revenues decreased for the three and nine months ended September 30, 2024, as compared to the same prior year period, due to a decline in casino revenues in our Las Vegas segment primarily driven by the decrease in gaming volume associated with the divestiture of Rio at the end of the third quarter of 2023 and lower table games hold. The Regional segment was negatively impacted by competition associated with new casino resorts opening in some of our regional markets, construction disruption from renovation projects at certain of our properties, and inclement weather in several of our property locations during the first quarter of 2024. These results were partially offset for the nine months ended September 30, 2024 by net revenues generated from the opening of our temporary gaming facilities at Caesars Virginia and Harrah’s Columbus Nebraska during the second quarter of 2023, followed by the permanent facility of Harrah’s Columbus Nebraska in May 2024. Furthermore, net revenues within our Caesars Digital segment improved due to a significant increase in iGaming handle coupled with improved hold and higher hold in sports betting.

Previous wording

Casino expenses increased for the six months ended June 30, 2024, as compared to the same prior year period, in connection with higher gaming taxes and software costs associated with increased revenues in our Caesars Digital segment, offset in part by lower gaming revenues in our Regional segment. We continue to strategically manage our marketing and advertising spend to reduce our casino expenses related to our Caesars Digital segment. Food and beverage expenses have increased mainly due to higher union and non-union wages in addition to increased employee head count in our Las Vegas segment associated with new food and beverage offerings. We continue to focus on labor efficiencies to manage increased labor costs.

Current wording

Casino expenses were flat for the three and nine months ended September 30, 2024, as compared to the same prior year period, in connection with higher gaming taxes and software costs associated with increased revenues in our Caesars Digital segment, offset in part by lower gaming revenues in our Regional segment. We continue to strategically manage our marketing and advertising spend to reduce our casino expenses related to our Caesars Digital segment. Food and beverage expenses have increased mainly due to higher union and non-union wages in addition to increased employee head count in our Las Vegas segment associated with new food and beverage offerings. We continue to focus on labor efficiencies to manage increased labor costs.

Previous wording

General and administrative expenses include items such as information technology, facility maintenance, utilities, property and liability insurance, expenses for administrative departments such as accounting, compliance, purchasing, human resources, legal, internal audit, property taxes and marketing expenses indirectly related to our gaming and non-gaming operations. General and administrative expenses decreased for the three and six months ended June 30, 2024, as compared to the same prior year periods, due to lower general advertising expenses and reduced rent expense related to the Rio which was divested at the end of the third quarter of 2023.

Current wording

General and administrative expenses include items such as information technology, facility maintenance, utilities, property and liability insurance, expenses for administrative departments such as accounting, compliance, purchasing, human resources, legal, internal audit, property taxes and marketing expenses indirectly related to our gaming and non-gaming operations. General and administrative expenses decreased for the three and nine months ended September 30, 2024, as compared to the same prior year periods, due to lower general advertising expenses and reduced rent expense related to the Rio which was divested at the end of the third quarter of 2023.

Previous wording

Depreciation and amortization expenses increased for the three and six months ended June 30, 2024 as compared to the same prior year period primarily related to recently completed construction projects.

Current wording

Depreciation and amortization expenses increased for the three and nine months ended September 30, 2024 as compared to the same prior year period primarily related to recently completed construction projects.

Previous wording

Transaction and other costs, net for the three and six months ended June 30, 2024 primarily includes non-cash losses on the write down and disposal of assets and non-cash changes in equity method investments. Transaction and other costs, net for the three and six months ended June 30, 2023 primarily includes pre-opening costs in connection with new property openings, professional services for integration activities and non-cash changes in equity method investments.

Current wording

Transaction and other costs, net for the three and nine months ended September 30, 2024 primarily includes non-cash losses on the write down and disposal of assets and non-cash changes in equity method investments. Transaction and other costs, net for the three and nine months ended September 30, 2023 primarily includes pre-opening costs in connection with new property openings, professional services for integration activities and non-cash changes in equity method investments.

Previous wording

Interest expense, net increased for the three and six months ended June 30, 2024, as compared to the same prior year period primarily due to the annual rent escalator associated with our VICI Leases. Interest expense associated with our debt instruments is also slightly higher due to our debt mix, partially offset by our continuing efforts to reduce outstanding debt. An increase in capitalized interest resulting from ongoing construction projects, including our new developments, has also offset the increase in total interest expense.

Current wording

Interest expense, net increased for the three and nine months ended September 30, 2024, as compared to the same prior year period primarily due to the annual rent escalator associated with our VICI Leases. Interest expense associated with our debt instruments is also slightly higher due to our debt mix, partially offset by our continuing efforts to reduce outstanding debt. An increase in capitalized interest resulting from ongoing construction projects, including our new developments, has also offset the increase in total interest expense.

Previous wording

For the six months ended June 30, 2024, loss on extinguishment of debt was primarily related to the prepayments of the CEI Senior Secured Notes due 2025 and the Caesars Resort Collection (“CRC”) Senior Secured Notes and the partial prepayment of the CEI Term Loan B. For the six months ended June 30, 2023, loss on extinguishment of debt was primarily related to the prepayments of the CRC Term Loan and the CRC Incremental Term Loan.

Current wording

For the nine months ended September 30, 2024, loss on extinguishment of debt was primarily related to the prepayments of the CEI Senior Secured Notes due 2025 and the Caesars Resort Collection (“CRC”) Senior Secured Notes and the partial prepayment of the CEI Term Loan B. For the nine months ended September 30, 2023, loss on extinguishment of debt was primarily related to the prepayments of the CRC Term Loan, the CRC Incremental Term Loan and the Baltimore Term Loan.

Previous wording

Other income (loss) for the six months ended June 30, 2024 primarily represents a change in estimate of our disputed claims liability.

Current wording

Other income (loss) for the nine months ended September 30, 2024 primarily represents a change in estimate of our disputed claims liability.

Previous wording

The income tax provision for the three and six months ended June 30, 2024 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to an increase in federal and state valuation allowances against the deferred tax assets for excess business interest expense.

Current wording

The income tax provision for the three and nine months ended September 30, 2024 differed from the expected income tax provision based on the federal tax rate of 21% primarily due to an increase in federal and state valuation allowances against the deferred tax assets for excess business interest expense.

Previous wording

The income tax benefit for the three and six months ended June 30, 2023 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to the partial release of federal and state valuation allowances.

Current wording

The income tax provision for the three months ended September 30, 2023 differed from the expected income tax provision based on the federal tax rate of 21% primarily due to an increase in federal and state valuation allowances against the deferred tax assets for excess business interest expense. The income tax benefit for the nine months ended September 30, 2023 differed from the expected income tax benefit based on the federal tax rate of 21% primarily due to the partial release of federal and state valuation allowances.

Previous wording

Segment comparison of the three and six months ended June 30, 2024 and 2023

Current wording

Segment comparison of the three and nine months ended September 30, 2024 and 2023

Previous wording

(a)Prior year gaming volumes include Rio’s table games drop of $23 million and $50 million for the three and six months ended June 30, 2023, respectively, and slot handle of $111 million and $244 million for the three and six months ended June 30, 2023, respectively.

Current wording

(a)Prior year gaming volumes include Rio’s table games drop of $20 million and $70 million for the three and nine months ended September 30, 2023, respectively, and slot handle of $98 million and $342 million for the three and nine months ended September 30, 2023, respectively.

Previous wording

Our Las Vegas segment’s net revenues, net income, Adjusted EBITDA and Adjusted EBITDA margin decreased for the six months ended June 30, 2024, as compared to the same prior year period. Net revenues were negatively impacted by lower casino volumes associated with the divestiture of Rio. The Las Vegas segment was also negatively impacted by higher operating costs associated with (a) higher union and non-union wages, (b) increased employee head count associated with new food and beverage offerings and (c) increased promotional costs associated with special events held over the Super Bowl weekend.

Current wording

Our Las Vegas segment’s net revenues, net income and Adjusted EBITDA decreased for the three and nine months ended September 30, 2024, as compared to the same prior year period. Net revenues, net income and gaming volumes were negatively impacted by the divestiture of Rio at the end of the third quarter of 2023, although the segment’s Adjusted EBITDA margin improved due to lower rent expense resulting from the divestiture and improved operating efficiencies. Casino revenues also declined as a result of lower table games hold, which was at the high end and mid-point of our typical range for the three and nine months ended September 30, 2024, respectively, but down compared to the same prior year periods. Entertainment revenues also declined due to the mix of headliner performances in the current year, as compared to prior year. These decreases were slightly offset by higher hotel and food and beverage revenues associated with improved hotel occupancy, higher room rates and new food and beverage offerings. Net income and Adjusted EBITDA in the Las Vegas segment in the nine months ended September 30, 2024 were also negatively impacted by higher operating costs associated with (a) higher union and non-union wages, (b) increased employee head count associated with new food and beverage offerings and (c) increased promotional costs associated with special events held over the Super Bowl weekend.

Previous wording

For the three and six months ended June 30, 2024, slot win percentage in the Las Vegas segment was within our typical range.

Current wording

For the three and nine months ended September 30, 2024, slot win percentage in the Las Vegas segment was within our typical range.

Previous wording

Our Regional segment’s net revenues decreased for the three and six months ended June 30, 2024, as compared to the same prior year period, primarily due to inclement weather in several of our regional property locations that negatively impacted visitor volume in the first quarter of 2024. Additionally, the continued impact of competition associated with new casino resorts opening in some of our regional markets and ongoing construction disruption from renovation projects at certain of our properties within the segment contributed to the decline in net revenues. The Regional segment has also experienced declines in gaming volume resulting from a shift in customer mix as our higher rated play has remained steady with some growth, partially offset by a reduction in unrated play. Moreover, Regional hotel revenues benefited from a national tournament that drove visitation to the northern Nevada region in the second quarter of 2023. The impact of these unfavorable factors were partially offset by the incremental revenues attributable to our temporary gaming facilities at Caesars Virginia and Harrah’s Columbus Nebraska that opened during the second quarter in 2023. The permanent facility of Harrah’s Columbus Nebraska opened in May 2024 following the closure of the temporary facility in March 2024.

Current wording

Our Regional segment’s net revenues, net income, Adjusted EBITDA and Adjusted EBITDA margin decreased for the three and nine months ended September 30, 2024, as compared to the same prior year period, primarily due to the continued impact of competition associated with new casino resorts opening in some of our regional markets and ongoing construction disruption from renovation projects at certain of our properties. Additionally, inclement weather in several of our regional property locations negatively impacted visitor volume in the first quarter of 2024. The impact of these unfavorable factors was partially offset for the nine months ended September 30, 2024 by the incremental revenues attributable to our temporary gaming facilities at Caesars Virginia and Harrah’s Columbus Nebraska that opened during the second quarter in 2023. The permanent facility of Harrah’s Columbus Nebraska opened in May 2024 following the closure of the temporary facility in March 2024.

Previous wording

As a result of the continued headwinds in the Regional segment impacting certain of our properties, we recorded impairments totaling $118 million during the six months ended June 30, 2024.

Current wording

As a result of the aforementioned factors impacting certain of our properties in the Regional segment, we recorded impairments totaling $118 million during the second quarter of 2024.

Previous wording

Slot win percentage in the Regional segment for the three and six months ended June 30, 2024 was within our typical range.

Current wording

Slot win percentage in the Regional segment for the three and nine months ended September 30, 2024 was within our typical range.

Previous wording

(a)Includes total promotional and complimentary incentives related to sports betting, iGaming, and poker of $62 million and $55 million for the three months ended June 30, 2024 and 2023, respectively, and $148 million and $132 million for the six months ended June 30, 2024 and 2023, respectively. Promotional and complimentary incentives for poker were $3 million for both the three months ended June 30, 2024 and 2023 and $6 million and $7 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

(a)Includes total promotional and complimentary incentives related to sports betting, iGaming, and poker of $66 million and $52 million for the three months ended September 30, 2024 and 2023, respectively, and $214 million and $184 million for the nine months ended September 30, 2024 and 2023, respectively. Promotional and complimentary incentives for poker were $5 million and $4 million for the three months ended September 30, 2024 and 2023 and $11 million for both the nine months ended September 30, 2024 and 2023.

Previous wording

(b)Caesars Digital generated an additional $199 million and $212 million of sports betting handle for the three months ended June 30, 2024 and 2023, respectively, and $478 million and $540 million for the six months ended June 30, 2024 and 2023, respectively, which is not included in this table, for select wholly-owned and third-party operations for which Caesars Digital provides services and we receive all, or a share of, the net profits. Hold related to these operations was 9.4% and 10.9%, for the three months ended June 30, 2024 and 2023, respectively, and 9.6% and 10.6% for the six months ended June 30, 2024 and 2023, respectively. Sports betting handle includes $11 million and $12 million for the three months ended June 30, 2024 and 2023, respectively, and $22 million and $24 million for the six months ended June 30, 2024 and 2023, respectively, related to horse racing and pari-mutuel wagers.

Current wording

(b)Caesars Digital generated an additional $191 million and $205 million of sports betting handle for the three months ended September 30, 2024 and 2023, respectively, and $669 million and $745 million for the nine months ended September 30, 2024 and 2023, respectively, which is not included in this table, for select wholly-owned and third-party operations for which Caesars Digital provides services and we receive all, or a share of, the net profits. Hold related to these operations was 12.7% and 8.9%, for the three months ended September 30, 2024 and 2023, respectively, and 10.5% and 10.1% for the nine months ended September 30, 2024 and 2023, respectively. Sports betting handle includes $10 million and $11 million for the three months ended September 30, 2024 and 2023, respectively, and $32 million and $35 million for the nine months ended September 30, 2024 and 2023, respectively, related to horse racing and pari-mutuel wagers.

Previous wording

Caesars Digital’s net revenues, net income (loss), Adjusted EBITDA, and Adjusted EBITDA margin improved significantly for the three and six months ended June 30, 2024, as compared to the same prior year period, primarily due to higher iGaming handle and iGaming hold coupled with improved sports betting hold. Sports betting hold improved for the three and six months ended June 30, 2024 compared to prior year, reflecting the benefit of continued investment in our sports betting platform.

Current wording

Caesars Digital’s net revenues, net income (loss), Adjusted EBITDA, and Adjusted EBITDA margin improved significantly for the three and nine months ended September 30, 2024, as compared to the same prior year periods, primarily due to higher iGaming handle and iGaming hold coupled with improved sports betting hold. iGaming handle and iGaming hold improved following the launch of Caesars Palace Online Casino in August 2023. The improved sports betting hold reflects the benefit of the continued investment in our sports betting platform.

Previous wording

Sports betting and iGaming hold percentages in the Caesars Digital segment for the three and six months ended June 30, 2024 were within our typical range.

Current wording

Sports betting and iGaming hold percentages in the Caesars Digital segment for the three and nine months ended September 30, 2024 were within our typical range.

Previous wording

We manage several properties and license rights to the use of certain of our brands. These revenue agreements typically include reimbursement of certain costs that we incur directly. Such costs are primarily related to payroll costs incurred on behalf of the properties under management. The revenue related to these reimbursable management costs has a direct impact on our evaluation of Adjusted EBITDA margin which, when excluded, reflects margins typically realized from such agreements. The table below presents the amount included in net revenues and total operating expenses related to these reimbursable costs.

Current wording

We manage several properties and license rights to the use of certain of our brands. These revenue agreements typically include reimbursement of certain costs that we incur directly. Such costs are primarily related to payroll costs incurred on behalf of the properties under management. The revenue related to these reimbursable management costs has a direct impact on our evaluation of Adjusted EBITDA margin which, when excluded, reflects margins typically realized from such agreements. The table below presents the amount included in net revenues and total operating expenses related to these reimbursable costs. In September 2023, we recorded $25 million of additional other revenue related to the termination of the Caesars Dubai management agreement, which has been excluded from Adjusted EBITDA.

Previous wording

Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the Three and Six Months Ended June 30, 2024 and 2023

Current wording

Supplemental Unaudited Presentation of Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) for the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

The following tables summarizes our Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023, respectively, in addition to reconciling net income (loss) to Adjusted EBITDA in accordance with GAAP (unaudited):

Current wording

The following tables summarizes our Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023, respectively, in addition to reconciling net income (loss) to Adjusted EBITDA in accordance with GAAP (unaudited):

Previous wording

(a)Benefit for income taxes during the three and six months ended June 30, 2023 includes the release of $940 million of valuation allowance against deferred tax assets.

Current wording

(a)Benefit for income taxes during the nine months ended September 30, 2023 includes the release of $940 million of valuation allowance against deferred tax assets.

Previous wording

(b)Other (income) loss for the six months ended June 30, 2024 primarily represents a change in estimate of our disputed claims liability.

Current wording

(b)Other (income) loss for the nine months ended September 30, 2024 primarily represents a change in estimate of our disputed claims liability.

Previous wording

(c)Impairment charges for the three and six months ended June 30, 2024 includes impairment within our Regional segment as a result of a decrease in projected future cash flows at certain properties primarily due to localized competition.

Current wording

(c)Impairment charges for the nine months ended September 30, 2024 includes impairments within our Regional segment, identified in the second quarter of 2024, as a result of a decrease in projected future cash flows at certain properties primarily due to localized competition.

Previous wording

(d)Transaction costs and other, net primarily includes costs related to non-cash losses on the write down and disposal of assets, professional services for transaction and integration costs, various contract exit or termination costs, pre-opening costs in connection with our temporary facility openings, and non-cash changes in equity method investments.

Current wording

(d)Transaction costs and other, net primarily includes costs related to non-cash losses on the write down and disposal of assets, professional services for transaction and integration costs, various contract exit or termination costs, pre-opening costs in connection with new property openings and expansion projects at existing properties, and non-cash changes in equity method investments. Additionally, transactions costs and other, net for the three and nine months ended September 30, 2023 includes (i) net proceeds received in exchange for participation rights in an insurance claim and (ii) proceeds received for the termination of the Caesars Dubai management agreement.