Caesars Entertainment, Inc.

The accompanying consolidated condensed financial statements include the accounts 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” within these financial statements.

This Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”). Capitalized terms used but not defined in this Form 10-Q have the same meanings as in the 2025 Annual Report.

We also refer to (i) our Consolidated Condensed Financial Statements as our “Financial Statements,” (ii) our Consolidated Condensed Balance Sheets as our “Balance Sheets,” (iii) our Consolidated Condensed Statements of Operations and Consolidated Condensed Statements of Comprehensive Income (Loss) as our “Statements of Operations,” and (iv) our Consolidated Condensed Statements of Cash Flows as our “Statements of Cash Flows.”

Note 1. Organization and Description of Business

Organization

The Company is a geographically diversified gaming and hospitality company that was founded in 1973 by the Carano family with the opening of the Eldorado Hotel Casino in Reno, Nevada. Beginning in 2005, the Company grew through a series of acquisitions, including the acquisition of MTR Gaming Group, Inc. in 2014, Isle of Capri Casinos, Inc. in 2017, Tropicana Entertainment, Inc. in 2018, Caesars Entertainment Corporation in 2020 and William Hill PLC in 2021. The Company’s ticker symbol on the NASDAQ Stock Market is “CZR.”

Proposed Merger of Caesars Entertainment, Inc. with Fertitta Entertainment, Inc.

On May 27, 2026, Caesars, Fertitta Gaming Holdco, LLC, a Texas limited liability company (“Fertitta Gaming”), Empire Merger Sub, Inc., a Delaware corporation and direct wholly owned subsidiary of Fertitta Gaming (“Merger Sub”), Landry’s Fertitta, LLC, a Texas limited liability company solely for the purposes of Section 9.14 of the Merger Agreement (as defined below), and Hospitality Headquarters, Inc., a Texas corporation, solely for the purposes of Section 9.14(j) therein, entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and direct wholly owned subsidiary of Fertitta Gaming (the “Merger”).

The board of directors of the Company (the “Board”) has (a) determined that it is fair to, and in the best interests of, the Company and its stockholders, and declared it advisable to, enter into the Merger Agreement, (b) approved the execution, delivery and performance by the Company of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger (collectively, the “Transaction”) and (c) resolved to recommend the adoption of the Merger Agreement by the stockholders of the Company (“Company Stockholders”) and to submit the Merger Agreement to the Company Stockholders for adoption. Capitalized terms used herein but not otherwise defined have the meaning set forth in the Merger Agreement.

Pursuant to the terms of the Merger Agreement, the Company filed a proxy statement with the U.S. Securities and Exchange Commission (the “SEC”) on August 26, 2026, and the Board recommended that the Merger Agreement and the Merger be adopted and approved by the Company’s stockholders. On September 22, 2026, the proposals described in the proxy statement were approved at a special meeting of the Company’s stockholders.

Merger Consideration

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (“Effective Time”), each share of common stock, par value $0.00001 per share (“Company Common Stock”) issued and outstanding immediately prior to the Effective Time, other than any “Excluded Shares”, “Parent Rollover Shares” or “Dissenting Shares”, each, as defined by the Merger Agreement, will be converted automatically into the right to receive an amount in cash equal to the sum of (i) $31.00 and (ii) if the Closing Date has not occurred as of June 26, 2027 (the “Ticking Fee Date”), an amount equal to (A) $0.007150 multiplied by (B) the number of days during the period beginning on (and including) the first calendar day of the month following the Ticking Fee Date and ending on (and including) the day immediately prior to the Closing Date (such sum, the “Merger Consideration”), in each case without interest thereon and subject to any applicable withholding tax in accordance with the Merger Agreement. The Parent Rollover Shares will be automatically converted into shares of common stock of the surviving corporation.

Treatment of Equity Awards

Each restricted stock unit award granted under the Company’s stock plan (subject to specifications in the Merger Agreement), including restricted stock units subject to performance or market-based conditions, whether vested or unvested, that is outstanding immediately prior to the Effective Time, will be fully cancelled and converted into the right to receive an amount in cash, without interest, equal to the product of (a) the aggregate number of shares of Company Common Stock subject to such Company Equity Award, multiplied by (b) the Merger Consideration.

Representations and Warranties; Covenants

The Merger Agreement contains customary representations, warranties and covenants from each of the Company and Fertitta Gaming, including representations and warranties from the Company regarding organization and standing, capitalization, authority, regulatory approvals, financial statements, absence of certain changes, litigation, compliance with laws, material contracts, real property, environmental matters, employee benefit plans and labor matters, taxes, takeover laws, intellectual property, insurance, accounting and internal controls and its present debt financing and covenants obligating the Company to use commercially reasonable efforts to conduct its business in all material respects in the ordinary course of business and to use reasonable best efforts to cooperate in seeking regulatory approvals and to not engage in certain specified activities without Fertitta Gaming’s prior consent.

Non-Solicitation and No-Shop

From and after July 11, 2026 (the “No Shop Period Start Date”) until the earlier of the Effective Time or termination of the Merger Agreement, the Merger Agreement prohibits the Company from soliciting competing acquisition proposals. However, subject to customary exceptions and limitations, prior to receiving stockholder approval, the Company was able to furnish non-public information to, and engage in discussions or negotiations with, a third party that made a bona fide, unsolicited written Alternative Proposal if the Board determined in good faith (after consultation with its outside financial advisors and outside legal counsel) that such Alternative Proposal constituted, or would have reasonably been expected to lead to, a Superior Proposal, and that the failure to take such action would have been reasonably likely to be inconsistent with the Board’s fiduciary duties under applicable law.

Conditions to the Transaction

Each of the Company and Fertitta Gaming’s obligation to consummate the Merger remains subject to the satisfaction or waiver of certain conditions, including, among others, the expiration or termination of any applicable waiting period under the HSR Act and the receipt of certain gaming regulatory approvals.

Termination Fees; End Date

The Merger Agreement contains customary termination rights, including the right of any party to terminate if the Effective Time has not occurred by May 27, 2027 (the “Initial End Date”); provided that the Initial End Date will be automatically extended to August 27, 2027 (the “First Extended End Date”) and the First Extended End Date shall be automatically extended to November 27, 2027 if, as of the Initial End Date and First Extended End Date, as applicable, all conditions precedent, other than the expiration of the waiting period under the HSR Act and/or receipt of certain required gaming approvals, have been satisfied or are capable of being satisfied.

Upon termination of the Merger Agreement under certain circumstances, including if the Merger Agreement is terminated and prior to such termination, an Alternative Proposal has been made to the Company or publicly announced and not publicly withdrawn and, within twelve (12) months after the date of such termination, the Company or any of its subsidiaries (a) consummates a transaction that is an Alternative Proposal, (b) enters into a definitive agreement with a Third Party with respect to a transaction that is an Alternative Proposal, or (c) the board of directors of the Company approves or recommends any Alternative Proposal to Company Stockholders and the transaction contemplated under such definitive agreement with respect to such Alternative Proposal is subsequently consummated (regardless of whether the consummation occurs within such twelve (12) month period), the Company will be required to pay Fertitta Gaming a termination fee of $200 million.

In addition, Fertitta Gaming will be required to pay the Company a reverse termination fee of $450 million under certain circumstances, including if either Fertitta Gaming or the Company terminates the Merger Agreement due to (a) there being any Law relating to Antitrust Law or Gaming Law prohibiting, permanently restraining, permanently enjoining or rendering unlawful the consummation of the Merger or (b) the End Date occurring and at such time all conditions except the regulatory approval conditions having been satisfied (or capable of being satisfied).

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement. A copy of the Merger Agreement is available as Exhibit 2.1 to our Current Report on Form 8-K filed on May 28, 2026.

Nasdaq Delisting

If the Merger is consummated, the Company intends to delist its Company Common Stock from Nasdaq and deregister the Company Common Stock under the Exchange Act, as promptly as practicable following the Effective Time.

During the three and nine months ended September 30, 2026, transaction costs related to the pending Merger were $12 million and $22 million, respectively.

Description of Business

The Company owns, leases, brands or manages an aggregate of 54 properties in 20 jurisdictions in North America with approximately 54,300 slot machines, video lottery terminals and e-tables, approximately 2,800 table games and approximately 46,100 hotel rooms as of September 30, 2026. In addition, the Company has other properties in North America that are authorized to use the brands and marks of Caesars Entertainment, Inc., as well as other non-gaming properties. The Company’s primary source of revenue is generated by its gaming operations, which includes its casino properties, retail and online sports betting, and online gaming. Additionally, the Company utilizes its hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to its properties.

The Company’s operations for retail and online sports betting, iGaming, horse racing and online poker are included under the Caesars Digital segment. The Company operates retail and online sports wagering across 35 jurisdictions in North America,28 of which offer online sports betting, and operates iGaming insix jurisdictions in North America as of September 30, 2026. The Company operates the Caesars Sportsbook app, the Caesars Racebook app, the Caesars Palace Online Casino app and the Horseshoe Online Casino app. The Company also expects to continue to grow its operations in the Caesars Digital segment as new jurisdictions legalize retail and online sports betting and iGaming.

Asset Purchases

Caesars Windsor

On March 3, 2026, the Company assumed responsibility for the operations of Caesars Windsor on behalf of the Ontario Lottery and Gaming Corporation (“OLG”) under a 20-year operating agreement. Upon signing the operating and asset purchase agreements, our previous management agreement was terminated. The Company purchased the net assets of Caesars Windsor which included approximately $42 million of furniture and equipment and approximately $12 million in net working capital. In addition, the Company entered into a 20-year lease agreement with the OLG for the buildings and land of Caesars Windsor. The initial term of the lease expires on March 2, 2046 with annual minimum rent expense of approximately $19 million. Caesars Windsor’s management fee was previously reported within the Managed and Branded segment. Beginning March 3, 2026, the property’s operations are reported within the Regional segment.

Grand Bazaar

The Company previously held a minority interest of approximately 8% in JGB Vegas Retail, LLC (“Grand Bazaar”) and leased certain land, buildings and improvements to Grand Bazaar which operated an indoor/outdoor shopping and entertainment district on the Las Vegas Strip adjacent to the Company’s operations. On May 1, 2026, the Company acquired the remaining outstanding membership interest of Grand Bazaar for total consideration of approximately $66 million, inclusive of $10 million of deferred consideration. The transaction was accounted for as an asset purchase of intangible assets, property and equipment, and working capital.

Note 2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Financial Statements contain all adjustments, all of which are normal and recurring, considered necessary for a fair presentation. The results of operations for these interim periods are not necessarily indicative of the operating results for other quarters, for the full year or any future period.

The presentation of financial information herein for the periods after the asset purchases previously described is not fully comparable to the periods prior to such asset purchases.

Our Financial Statements include the accounts of Caesars Entertainment, Inc. and its subsidiaries after elimination of all intercompany accounts and transactions. See Note 12 for segment information.

Consolidation of Subsidiaries and Variable Interest Entities

We consolidate all subsidiaries in which we have a controlling financial interest and variable interest entities (“VIEs”) for which we or one of our consolidated subsidiaries is the primary beneficiary. Control generally equates to ownership percentage, whereby (i) affiliates that are more than 50% owned are consolidated; (ii) investments in affiliates of 50% or less but greater than 20% are generally accounted for using the equity method where we have determined that we have significant influence over the entities; and (iii) investments in affiliates of 20% or less are generally accounted for as investments in equity securities.

We consider ourselves the primary beneficiary of a VIE when we have both the power to direct the activities that most significantly impact the economic performance of the VIE and the right to receive benefits or the obligation to absorb losses that could be potentially significant to the VIE. We review investments, if a reconsideration event occurs, to determine if the investment qualifies, or continues to qualify, as a VIE. If we determine an investment qualifies, or no longer qualifies, as a VIE, there may be a material effect to our Financial Statements.

Fair Value Measurements

The Company measures certain of its financial assets and liabilities at fair value, on a recurring basis, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Levels of the hierarchy prioritize the inputs used to measure fair value and include:

•Level 1: Observable inputs such as quoted prices in active markets.

•Level 2: Inputs other than quoted prices in active markets that are either directly or indirectly observable.

•Level 3: Unobservable inputs that reflect the Company’s own assumptions, as there is little, if any, related market activity.

Cash and Cash Equivalents

Cash equivalents include investments in money market funds that can be redeemed immediately at the current net asset value per share. A money market fund is a mutual fund whose investments are primarily in short-term debt securities designed to maximize current income with liquidity and capital preservation, usually maintaining per share net asset value at a constant amount, such as one dollar. The carrying amounts approximate the fair value because of the short maturity of those instruments (Level 1). Cash and cash equivalents also include cash maintained for gaming operations.

Restricted Cash

Restricted cash includes cash or cash equivalents held in certificates of deposit accounts or money market type funds, that are not subject to remeasurement on a recurring basis, which are restricted under certain operating agreements or restricted for future capital expenditures in the normal course of business.

Marketable Securities

Marketable securities consist primarily of trading securities held by the Company’s deferred compensation plans. The estimated fair values of the Company’s marketable securities are determined on an individual asset basis based upon quoted prices of identical assets available in active markets (Level 1) and represent the amounts the Company would expect to receive if the Company sold these marketable securities. As of September 30, 2026 and December 31, 2025, the Company held $2 million in marketable securities.

Derivative Instruments

The Company may enter into derivative instruments to hedge the risk of fluctuations in interest rates, foreign exchange rates or pricing for other commodities. These agreements are designated as cash flow hedges. As of September 30, 2026 and December 31, 2025, the Company did not hold any cash flow hedges or any derivative financial instruments for trading purposes.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Advertising

Advertising costs are expensed in the period the advertising first occurs. Advertising costs were $60 million and $62 million for the three months ended September 30, 2026 and 2025, respectively, and $165 million and $171 million for the nine months ended September 30, 2026 and 2025, respectively, and are primarily included within Casino expense where directly attributable to gaming activities or General and administrative expense for other indirect advertising.

Interest Expense, Net

Recently Issued Accounting Pronouncements

Pronouncements to Be Implemented in Future Periods

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06, “Intangibles-Goodwill and Other-Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software.” Currently, entities are required to capitalize development costs incurred for internal-use software depending on the nature of the costs and project stage. The amendments in this update improve the operability of the guidance by removing all references to software development project stages so that guidance is neutral to different software development methods. Amendments in this update are effective for all entities for annual periods beginning after December 15, 2027. An entity may apply the new guidance: i) prospectively, ii) using a modified transition approach based on the status of a project, or iii) retrospectively. We do not expect the amendments in this update to have a material impact on our Financial Statements.

In November 2024 (as clarified in January 2025 by ASU 2025-01), FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures,” which requires additional disclosure about specific expense categories in the notes to financial statements which is generally not presented in financial statements today. This update applies to all public business entities and will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. We do not expect the amendments in this update to have a material impact on our Financial Statements.

Note 3. Property and Equipment, net

A portion of our property and equipment is subject to various operating leases for which we are the lessor. Leased property includes our hotel rooms, convention space and retail space through various short-term and long-term operating leases.

Depreciation is calculated using the straight-line method over the shorter of the estimated useful life of the asset or the related lease.

Note 4. Goodwill and Intangible Assets, net

Amortization expense with respect to intangible assets for the three months ended September 30, 2026 and 2025 totaled $37 million and $33 million, respectively, and for the nine months ended September 30, 2026 and 2025 totaled $104 million and $99 million, respectively, which is included in Depreciation and amortization in the Statements of Operations.