Caesars Entertainment navigates investor concerns five years after historic merger

Investor confidence in Caesars Entertainment has eroded sharply, five years after the company’s high-profile merger with Eldorado Resorts promised to reshape the U.S. casino sector, reports Bloomberg. Caesars’ shares have lost nearly half their value since the US$17 billion deal in 2020, underperforming its Las Vegas rivals and raising doubts about the long-term strategy of Chief Executive Officer Tom Reeg.

Analysts say the former Eldorado team, once celebrated for turning around smaller regional casinos, has struggled to manage the complexities of the Strip’s fiercely competitive market.

Jefferies LLC downgraded Caesars' stock from “buy” to “hold” on November 4, pointing to disappointing third-quarter results, costly leases, and lagging room renovations. “The path to upside,” analyst David Katz wrote, “is getting more complex.”

Chief Executive Officer Tom Reeg

Stifel Financial Corp’s Steven Wieczynski was blunter in an October 28 note: “We have talked previously about CZR now being a ‘show me story,’ but we think it’s fair to say this has gone beyond that to something even more Draconian.”

Those warnings come as Caesars faces slipping profits and slowing growth. Sales, which peaked in 2023, are projected to rise by only about 2% this year. The company’s Las Vegas resorts, which generate more than a third of total revenue, are also contending with a weaker tourist economy.

Visitor arrivals to the city declined for a ninth straight month in September amid global economic uncertainty and fewer international travelers, particularly from Canada.

The downturn has been compounded by what some guests describe as overpricing. Self-parking at Caesars Palace costs US$25, while the daily resort fee runs to US$55, and diners pay US$20 extra per person for prime seats at celebrity chef Gordon Ramsay’s restaurant.

Caesars Palace

“Caesars used to have an aura about it,” one customer wrote on Reddit. “It was the Palace. In its heyday it was the most opulent resort on the Strip.”

Former executives and loyal patrons alike say the company has become more rigid under Reeg. Several cost-saving moves, including the closure of the Laurel Lounge for high rollers, have stirred resentment among regulars. At Caesars Palace, even in-room coffee now carries a price tag, US$25 for a four-pack of Keurig pods.

Reeg, however, maintains that the company’s pricing reflects market realities and that it continues to offer “options for guests of all budgets.” On a conference call with analysts, he said he expects improved performance in the fourth quarter, citing a rebound in conventions and business travel.

The challenges are not limited to brick-and-mortar resorts. Caesars’ 2021 acquisition of UK bookmaker William Hill plc was meant to accelerate its push into online gambling, but progress has been slow. After cutting back on costly promotions, Caesars now ranks fifth in the U.S. sports betting market, holding less than a 5% share, according to data from analyst Alfonso Straffon.

The company has set a goal of US$500 million in earnings before interest, taxes, depreciation, and amortization from online gaming by 2026, but through the first nine months of 2025, it earned only US$151 million.

Render of Caesars Palace, Times Square

A separate setback came in September, when local opposition ended Caesars’ bid to develop a casino in New York’s Times Square, a project that could have anchored its East Coast expansion.

Caesars’ struggles stand in contrast to how its rivals have differentiated themselves. Wynn Resorts Ltd focuses on luxury clientele, MGM Resorts International leans on entertainment and sports, and Las Vegas Sands Corp (before selling the Venetian in 2022) emphasized the convention market. Caesars once held an edge with its loyalty program, which linked gamblers from smaller regional casinos to its flagship resorts.

Reeg remains optimistic about that legacy. He has described the loyalty program as “the most impactful customer programme that there is among any operator,” noting that earnings from the company’s Las Vegas resorts are higher than before the merger. 

Recent projects include a US$20 million pool renovation and new restaurants at the Flamingo, and the rebranding of the Cromwell into a Vanderpump Hotel with television personality Lisa Vanderpump, set to open early next year. “We feel fantastic about Vegas fundamentally,” Reeg told analysts on a recent earnings call. “And we think it won’t be very long until that’s a story where we’ll be talking about.”