Earlier this week, Caesars Entertainment CEO Tom Reeg pissed on your head and told you it was raining. “There’s really no crisis happening in Vegas,” Reeg sniffed. “This is normal economic-cycle activity. The city’s and all of our properties are doing quite well.” In case you’re wondering, “normal” activity looks like 4.5% less revenue for all of 2025. If visitation was to Las Vegas down again in January (the numbers aren’t out yet), it will mark a full year of decline. We’d call that a crisis. And, with international visitation to the United States off by 11 million people, it might be time for Reeg’s overpaid sphincter to start puckering.
“Las Vegas declines get less bad” was the best spin that J.P. Morgan analyst Daniel Politzer could put on the numbers. So little does Wall Street think of Sin City right now that a down Vegas was “as expected.” Weather was blamed for an underperformance by Caesars’ outlying casinos. “It was a pleasantly uneventful quarter, which given market fears on Las Vegas and negative sentiment … should be well received,” Politzer wrote. Cash flow isn’t slumping as fast—down 6% in 4Q25, as opposed to -13% in 3Q25. Politzer projected Caesars’ cash flow to dip 3% in the current quarter and flatten out at $470 million in the spring. You wouldn’t know it from the numbers by state, but the Roman Empire’s digital assets were said to have 20% revenue growth. Then again, when you have so little revenue, any growth is bound to look significant. Politzer concluded that Caesars “is executing well in a tough environment” but lowered his price target from $37/share to $36.
The absence of a New Orleans-based Super Bowl will give the regional casinos a tough comparison in 1Q26, noted Truist Securities analyst Barry Jonas, but things should pick up from there. Also, Caesars appeared to be shrugging off the incursion of prediction markets, which is good to see. Another positive for CZR was that last year saw record amounts of slot handle on the Las Vegas Strip. After carpet-bombing its provincial casinos with promotions, Caesars is now pulling back “from broad promo spend to more targeted reinvestments,” according to Jonas. He took a conservative view of the online performance, trimming his targets back considerably. Terrestrially, the Roman Empire would like to get in on Fairfax County, should voters in Virginia opt to put a casino there. Although Jonas was also Buy-rated on CZR stock, he knocked a dollar off his price target, from $30/share to $29.
Following his colleagues, Steven Pizzella of Deutsche Bank was somewhat ho-hum on Caesars’ numbers (“as expected“), though he saw cause for muted hope: “Management noted the leisure traveler still remains soft on a year over year basis, but not as pronounced as it was in the summer.” He noted that CZR is banking on a State Farm convention in Vegas that is exclusive to them. That event “should put Las Vegas in a position to achieve year over year gains, while the summer would depend on further stabilization of the leisure customer, as in the shoulder periods, where there are not big events or conferences, demand is challenging.” Caesars claimed to have had “a record year” for the Las Vegas Grand Prix, which should be set in the context that previous runnings had somewhat disappointed for CZR and that November was still one of Vegas’ weaker months of the year. The company also counted on Caesars New Orleans and Caesars Virginia (currently outperforming) to give it propulsion in ’26, and looked forward to Maine‘s inception of iGaming. Like his fellows, Pizzella trimmed his price target by a dollar, bringing it to $35/share.
Keeping a “Hold” on CZR, David Katz of Jefferies Equity Research aslo sounded a conservative note. His price target was the lowest ($24/share, down from $25). He did suggest the shares were finally stable, given buybacks and management’s (reluctant?) retirement of debt. Katz pointed out that Caesars was only off Wall Street’s target by $1 million for cash flow ($901 million). It also came very close to forecasts for revenue, with $2.9 billion. Katz didn’t have a lot of new information to add, save that the Vegas casinos were improving on a sequential basis (i.e., not year over year). Given Wall Street’s low-ish expectations for the Roman Empire, it shouldn’t be difficult to outperform from here.
Can’t Wynn for Losing. The debility of Las Vegas even caught up with Wynn Resorts, which everyone thought was insulated from economic downturns. After all, its orientation is toward the high-end customer. Wall Street expected $588 million in 4Q25 cash flow and Wynn delivered just $569 million. Comparisons evidently don’t get any easier for Wynn going forward and its non-gambling amenities, hitherto a strength, were apparently its soft underbelly. Plus, Encore rooms are going off line this year, for renovation (80,000 room nights lost). Much of the problem, however, lay in Macao, despite high gambling volumes overseas. The enclave came up $26 million short on cash flow.
Deutsche Bank‘s Steven Pizzella pointed out that Wynncore was actually up in terms of table wagering (2%), slot play (+3%) and room rates (2%). He added that “group and convention business is scheduled to grow pace and room nights year over year.” In Boston, Wynn was coming off a weakish quarter but “they expect to see a direct impact from the World Cup in Boston and have a strategy for Las Vegas to try and take advantage of the proximity of the World Cup and entice visitors to make a trip.” That’s an interesting strategy and shows Wynn thinking outside the box. Good for them. Still, Pizzella projected an off 2026 for Wynn, with a comeback in 2027.
Like others, David Katz of Jefferies Equity Research had his eye on next year, which sees the debut of Wynn Al Marjan (below), whereupon the cash spigot that is the United Arab Emirates is expected to gush. Whereas Pizzella emphasized table wagers, Katz noted that Wynncore held poorly, as did the Macanese casinos. (Lady Luck did not smile upon Wynn last quarter, it seems.) Even so, Wynncore’s $688 million in revenue was way ahead of Katz’s expected $644 million. Looking ahead, management intends to manufacture some Sin City business by jacking up room rates during the Encore renovation. Let’s hope that doesn’t chase off the World Cup business Wynn is courting.
“The sound of estimates hitting bottom.” That’s what David Katz of Jefferies Equity Research called DraftKings‘ 4Q25 earnings call. Even so, he remained Buy-rated on the stock, writing, “The ‘can’t stop ’em, so beat ’em’ strategy for prediction markets is most likely correct, although our focus is on the conservatism in guidance, which bears the brunt cost of predictions launch without any revenue, ESPN Bet development and the launch of new states.” He added that “Demand for US sports wagering is not decelerating, but evolving” and that DKNG would continue to benefit. DraftKings booked $2 billion in revenue, which was just what Wall Street anticipated. That’s a 43% leap and cash flow was way up, too: $343 million when The Street thought it would be $272 million. That’s despite a player base that hasn’t grown and is smaller than the stock boffins expected. Punters dropped $139 a month on average, higher than Wall Street’s anticipated $122. So business is good, prediction markets be damned.
It also helped that sports results were more favorable (to The Man, that is) than expected and parlay—sucker bets to us—were up as well. That being said, DraftKings guided to lower numbers than previously forecast for 2026: as low as $6.5 billion in revenue rather than the $7.3 billion Wall Street had modeled. J.P. Morgan analyst Daniel Politzer called the earnings revision “more as a tacit admission of industry growth concerns than a beatable target.” DraftKings execs “noted its guide was intentionally conservative, and separately, its more aggressive foray into prediction markets reflects greater CFTC clarity. Uncertainty abounds and our patience is wearing thin,” but Politzer would bide what little he had left until a March 2 investor event.
In order for the DraftKings narrative to make sense, Politzer explained, “industry handle needs to improve, and medium-term, investors need clarity on why DKNG is positioned to achieve its fair share in prediction markets.” Whilst waiting for the Alberta market to come online (probably this spring), DraftKings is seeing its iGaming division burgeoning faster than its OSB one. CEO Jason Robins‘ peeps said “Missing numbers again is just not acceptable,” and good for them! We’d love to see more of that kind of accountability in Big Gaming.
Truist Securities analyst Barry Jonas called DKNG’s guidance “underwhelming,” although management said it “meant to be aggressively conservative to hopefully drive a beat and raise cycle this year.” Priming the pump, huh? Very clever. That wasn’t enough to prevent a sudden sell-off of the stock. Robins in banking on business from Maine as well as Alberta, although we wouldn’t count any chickens in the Pine Tree State yet, where a number of variables are in play. The CEO also wasn’t above threatening tax-happy states like Illinois, saying “states would be absolutely crazy right now” if they raised levies on OSB, given the prediction-market threat. That would be more convincing if Robins’ weren’t open drooling over event contracts, predicting “hundreds of millions” in revenue from them. Yes, states should stop doubling down on OSB imposts—and Robins should stop trying to have it both ways, playing victim while also being an exploiter of prediction-market slime.
Robins’ bludgeoning aside, the tax threat is very real. Arizona Gov. Katie Hobbs (D) wants to jump the revenue tax there from 10% to 45%. iGaming in Michigan is looking at a prospective tax rate of 36%, up from 28%. Jonas calculated a $113 million hit to DraftKings alone from such tax wallops. Then there’s the “nuclear option” of dumping OSB altogether and going pure prediction market. Which would surely exacerbate state-level retaliation. And so forth. Like most arms races, it can’t won by anybody.
Uff da! See you next week, friends.