Caesars Entertainment, Inc.CZR
Caesars Entertainment, Inc. Income Taxes Disclosure
Income Taxes
The components of the Company’s provision for income taxes for the years ended December 31, 2025, 2024 and 2023 are presented below.
| Components of Income (Loss) Before Income Taxes | Years Ended December 31, | ||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| United States | $ | (477) | $ | (150) | $ | (90) | |||||||||||
| Outside of the U.S. | 29 | 26 | 30 | ||||||||||||||
| $ | (448) | $ | (124) | $ | (60) | ||||||||||||
Income Tax Provision (Benefit) from Operations | Years Ended December 31, | ||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| United States | |||||||||||||||||
| Current | |||||||||||||||||
| Federal | $ | 27 | $ | 38 | $ | — | |||||||||||
| State & Local | 12 | 27 | 23 | ||||||||||||||
| Deferred | |||||||||||||||||
| Federal | (50) | 36 | (754) | ||||||||||||||
| State & Local | (7) | (23) | (166) | ||||||||||||||
| Outside of the U.S. | |||||||||||||||||
| Current | 9 | 10 | 9 | ||||||||||||||
| Deferred | (2) | (1) | — | ||||||||||||||
| $ | (11) | $ | 87 | $ | (888) | ||||||||||||
The following is an allocation of the total income tax provision (benefit) for the years ended December 31, 2025, 2024 and 2023:
| Years Ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Income tax provision (benefit) applicable to: | |||||||||||||||||
Income (loss) from operations | $ | (11) | $ | 87 | $ | (888) | |||||||||||
| Additional paid-in capital | — | — | (12) | ||||||||||||||
| Other comprehensive income | — | — | 1 | ||||||||||||||
The following is a reconciliation of the statutory federal income tax of 21% to the Company’s reported income tax provision (benefit) for the years ended December 31, 2025, 2024 and 2023:
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||
| Federal statutory income tax provision (benefit) | $ | (94) | 21.0 | % | $ | (26) | 21.0 | % | $ | (13) | 21.0 | % | |||||||||||||||||||||||
State and local income tax provision (benefit) * | 3 | (0.7) | % | 2 | (1.6) | % | (114) | 190.0 | % | ||||||||||||||||||||||||||
| Foreign taxes | |||||||||||||||||||||||||||||||||||
| United Kingdom | |||||||||||||||||||||||||||||||||||
| Branch taxes | 4 | (0.9) | % | 4 | (3.2) | % | 3 | (5.0) | % | ||||||||||||||||||||||||||
| Other | (1) | 0.2 | % | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Other foreign jurisdictions | — | — | % | 2 | (1.6) | % | 3 | (5.0) | % | ||||||||||||||||||||||||||
| Federal effect of change in tax law or rates | — | — | % | — | — | % | — | — | % | ||||||||||||||||||||||||||
| Federal effect of cross-border tax laws | — | — | % | (1) | 0.8 | % | (1) | 1.7 | % | ||||||||||||||||||||||||||
| Federal tax credits | |||||||||||||||||||||||||||||||||||
| Research and development tax credit | (3) | 0.7 | % | (3) | 2.4 | % | (7) | 11.7 | % | ||||||||||||||||||||||||||
| FICA tax credit | (7) | 1.6 | % | (8) | 6.5 | % | (8) | 13.3 | % | ||||||||||||||||||||||||||
| Foreign tax credit | 4 | (0.9) | % | (4) | 3.2 | % | — | — | % | ||||||||||||||||||||||||||
Other tax credits | (1) | 0.2 | % | (1) | 0.8 | % | (1) | 1.7 | % | ||||||||||||||||||||||||||
| Change in federal valuation allowance | 43 | (9.6) | % | 56 | (45.2) | % | (764) | 1274.0 | % | ||||||||||||||||||||||||||
| Federal effect of nontaxable or nondeductible items | |||||||||||||||||||||||||||||||||||
| Goodwill impairments | 27 | (6.0) | % | 53 | (42.7) | % | 3 | (5.0) | % | ||||||||||||||||||||||||||
| Nondeductible compensation and benefits | 7 | (1.6) | % | 8 | (6.5) | % | 8 | (13.3) | % | ||||||||||||||||||||||||||
| Minority interests | (14) | 3.1 | % | (14) | 11.3 | % | (9) | 15.0 | % | ||||||||||||||||||||||||||
| Share based compensation awards | 12 | (2.7) | % | 12 | (9.7) | % | 10 | (16.7) | % | ||||||||||||||||||||||||||
| Other nontaxable or nondeductible items | 4 | (0.9) | % | 6 | (4.8) | % | 2 | (3.3) | % | ||||||||||||||||||||||||||
| Increase/(decrease) in unrecognized tax benefits | 6 | (1.3) | % | 1 | (0.8) | % | — | — | % | ||||||||||||||||||||||||||
| Other | (1) | 0.3 | % | — | (0.1) | % | — | (0.1) | % | ||||||||||||||||||||||||||
| Reported income tax provision (benefit) | $ | (11) | 2.5 | % | $ | 87 | (70.2) | % | $ | (888) | 1480.0 | % | |||||||||||||||||||||||
____________________
* In 2025, state and local income taxes in Maryland and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category. In 2024, state and local income taxes in Florida, Maryland, and New Jersey made up the majority of the tax effect in this category. In 2023, state and local income taxes in Illinois and New Jersey made up the majority of the tax effect in this category.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred taxes at December 31, 2025 and 2024 are as follows:
| As of December 31, | |||||||||||
| (In millions) | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| Loss carryforwards | $ | 391 | $ | 391 | |||||||
| Excess business interest expense | 549 | 499 | |||||||||
| Credit carryforwards | — | 39 | |||||||||
| Financing obligation | 2,707 | 2,673 | |||||||||
| Long-term lease obligation | 220 | 202 | |||||||||
| Other | 238 | 237 | |||||||||
| 4,105 | 4,041 | ||||||||||
| Deferred tax liabilities: | |||||||||||
| Identified intangibles | (713) | (677) | |||||||||
| Fixed assets | (2,099) | (2,214) | |||||||||
| Right-of-use assets | (183) | (168) | |||||||||
| Other | (80) | (94) | |||||||||
| (3,075) | (3,153) | ||||||||||
| Valuation allowance | (1,021) | (956) | |||||||||
Net deferred tax assets (liabilities) | $ | 9 | $ | (68) | |||||||
Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use existing deferred tax assets. The Company is carrying a valuation allowance on certain federal and state deferred tax assets that are not more likely than not to be realized in the future. The Company has assessed the changes to the valuation allowance, including realization of the disallowed interest expense deferred tax asset, using the integrated approach.
As of December 31, 2025, the Company had federal and state net operating loss carryforwards of $15 million and $9.1 billion, respectively, and federal general business tax credit and research tax credit carryforwards of $52 million, which will expire on various dates as follows:
| Year of Expiration | Net Operating Losses | Tax Credits | |||||||||||||||
| (In millions) | Federal | States | Federal | ||||||||||||||
| 2026-2030 | $ | — | $ | 1,245 | $ | — | |||||||||||
| 2031-2035 | 15 | 3,829 | — | ||||||||||||||
| 2036-2045 | — | 1,603 | 52 | ||||||||||||||
| Do not expire | — | 2,387 | — | ||||||||||||||
| $ | 15 | $ | 9,064 | $ | 52 | ||||||||||||
In general, Section 382 of the Internal Revenue Code provides an annual limitation with respect to the ability of a corporation to utilize its net operating loss carryovers, as well as certain built-in losses, against future taxable income in the event of a change in ownership. It is unlikely that the limitation will adversely affect the Company’s ability to utilize its net operating loss carryovers against its future taxable income.
| Reconciliation of Unrecognized Tax Benefits | Years Ended December 31, | ||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Balance as of beginning of year | $ | 116 | $ | 124 | $ | 128 | |||||||||||
| Additions based on tax positions related to the current year | — | — | — | ||||||||||||||
| Additions for tax positions of prior years | 4 | 1 | 1 | ||||||||||||||
| Reductions for tax positions for prior years | — | (9) | (5) | ||||||||||||||
| Expiration of statutes | — | — | — | ||||||||||||||
| Balance as of end of year | $ | 120 | $ | 116 | $ | 124 | |||||||||||
We classify reserves for tax uncertainties within Other long-term liabilities in our Balance Sheets, separate from any related income tax payable, deferred tax asset, or deferred tax liability. Reserve amounts relate to any potential income tax liabilities resulting from uncertain tax positions as well as potential interest or penalties associated with those liabilities.
We accrue interest and penalties related to unrecognized tax benefits in income tax expense. During 2025, we increased our unrecognized tax benefits by $4 million, primarily due to federal and state research tax credits claimed. During 2024, we decreased our unrecognized tax benefits by $8 million, primarily due to a reduction in the Louisiana state tax rate due to a change in tax law. During 2023, we decreased our unrecognized tax benefits by $4 million, primarily due to the noncash settlement of a state audit. There was an accrual for the payment of interest and penalties of $2 million and $1 million as of December 31, 2025 and December 31, 2024, respectively. Included in the balances of unrecognized tax benefits as of December 31, 2025 and December 31, 2024 was $110 million and $106 million, respectively, of unrecognized tax benefits that, if recognized, would impact the effective tax rate.
In 2021, the Organization for Economic Co-operation and Development (the “OECD”) established an Inclusive Framework on Base Erosion and Profit Shifting and agreed on a two-pillar solution (“Pillar Two”) to global taxation, focusing on global profit allocation and a 15% global minimum effective tax rate. The OECD issued Pillar Two model rules and continues to release guidance on these rules. While the US has not yet adopted the Pillar Two rules, various other countries around the world are enacting legislation. We will continue to analyze the law to determine potential impacts. We currently do not expect the Framework to have a material impact on our effective tax rate or our financial statements.
The Company, including its subsidiaries, files tax returns with federal, state and foreign jurisdictions. The Company does not have tax sharing agreements with the other members within the consolidated group. With few exceptions, the Company is no longer subject to US federal or state and local tax assessments by tax authorities for years before 2022.
The following is a break-out of the significant income taxes paid (refunded) for the years ended December 31, 2025, 2024 and 2023:
| Years Ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
Federal * | $ | 60 | $ | 10 | $ | — | |||||||||||
| State | |||||||||||||||||
Florida | 1 | 7 | 1 | ||||||||||||||
Illinois | 3 | 3 | 3 | ||||||||||||||
New Jersey | 4 | 7 | 3 | ||||||||||||||
Virginia | (3) | 5 | — | ||||||||||||||
Other states | 6 | 5 | 7 | ||||||||||||||
| Foreign | |||||||||||||||||
Canada | 3 | 4 | 5 | ||||||||||||||
United Kingdom | 6 | 5 | 7 | ||||||||||||||
Other foreign | 1 | 2 | — | ||||||||||||||
| $ | 81 | $ | 48 | $ | 26 | ||||||||||||
____________________
* Included in the Federal income taxes paid for the year ended December 31, 2025 is $19 million of tax credits that the Company purchased from a third-party.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Mar 13, 2017 | |
| 2015 | Mar 15, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.