Caesars Entertainment, Inc.CZR
Caesars Entertainment, Inc. Leases Disclosure
Leases
The Company has operating and finance leases for various real estate and equipment. Certain of the Company’s lease agreements include rental payments based on a percentage of sales over specified contractual amounts, rental payments adjusted periodically for inflation and rental payments based on usage. The Company’s leases include various short-term and long-term extension options. If we are reasonably certain an extension option will be exercised, the renewal period is currently included in the lease term. The Company’s lease agreements do not contain any material restrictive covenants, other than those described below.
Lessee Arrangements
Operating Leases
The Company leases real estate and equipment used in operations from third parties. In addition to minimum rental commitments, certain of the Company’s operating leases provide for contingent rentals based on a percentage of revenues in excess of specified amounts. The Company does not include costs associated with non-lease components in the lease costs disclosed in the table below. During the years ended December 31, 2025 and 2024, the Company obtained $25 million and $10 million, respectively, of right-of-use (“ROU”) assets in exchange for new lease liabilities. During both the years ended December 31, 2025 and 2024, the Company disposed of $1 million of ROU assets and lease liabilities.
The Company has elected the short-term lease measurement and recognition exemption and does not establish ROU assets or liabilities for operating leases with terms of 12 months or less.
Operating leases recorded on the balance sheet consist of the following:
| December 31, | ||||||||||||||||||||
| (In millions) | Classification on the Balance Sheet | 2025 | 2024 | |||||||||||||||||
| Assets: | ||||||||||||||||||||
| Operating lease ROU assets | $ | 604 | $ | 604 | ||||||||||||||||
| Liabilities: | ||||||||||||||||||||
Current operating lease liabilities | 20 | 21 | ||||||||||||||||||
Non-current operating lease liabilities | 722 | 716 | ||||||||||||||||||
| Lease Terms and Discount Rate | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| Weighted Average Remaining Lease Term (in years) | 30.9 | 31.7 | |||||||||
| Weighted Average Discount Rate | 8.1 | % | 8.2 | % | |||||||
| Components of Lease Expense | |||||||||||||||||
| Years Ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Operating lease expense | $ | 87 | $ | 81 | $ | 96 | |||||||||||
| Short-term and variable lease expense | 147 | 158 | 159 | ||||||||||||||
| Total operating lease costs | $ | 234 | $ | 239 | $ | 255 | |||||||||||
Supplemental cash flow information related to leases is as follows:
| Cash payments included in the measurement of lease liabilities | |||||||||||||||||
| Years Ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Operating cash flows for operating leases | $ | 81 | $ | 81 | $ | 116 | |||||||||||
| Maturities of Lease Liabilities | |||||
| (In millions) | Operating Leases | ||||
| 2026 | $ | 81 | |||
| 2027 | 82 | ||||
| 2028 | 80 | ||||
| 2029 | 78 | ||||
| 2030 | 74 | ||||
| Thereafter | 1,795 | ||||
| Total future minimum lease payments | 2,190 | ||||
| Less: present value factor | (1,448) | ||||
| Total lease liability | $ | 742 | |||
Finance Leases
The Company has finance leases for certain equipment and real estate. As of December 31, 2025, the Company’s finance leases had remaining lease terms of up to approximately 33 years, some of which include options to extend. The Company’s finance lease ROU assets and liabilities were $136 million and $147 million as of December 31, 2025, respectively, and $60 million and $68 million as of December 31, 2024, respectively.
Financing Obligations
VICI Leases & Golf Course Use Agreement
The fair value of the real estate assets and the related failed sale-leaseback financing obligations were estimated based on the present value of the estimated future lease payments over the lease term of 15 years, plus renewal options, using an imputed discount rate of approximately 11.01%.
CEI leases certain real property assets from VICI under the following agreements: (i) for a portfolio of properties located throughout the United States (the “Regional Lease”), (ii) for Caesars Palace Las Vegas and Harrah’s Las Vegas (the “Las Vegas Lease”), and (iii) for Harrah’s Joliet (the “Joliet Lease”), (collectively, “VICI Leases”). The lease agreements, inclusive of all amendments, include (i) a 15-year initial term with four five-year renewal options, (ii) initial annual fixed rent payments of $1.1 billion, subject to annual escalation provisions based on the Consumer Price Index (“CPI”) and a 2% floor which commenced in lease year two of the initial terms and (iii) a variable element based on net revenues of the underlying leased properties, which commenced in lease year of the initial term.
The put-call right agreement whereby the Company could have required VICI to purchase and lease back (as lessor), or whereby VICI could require the Company to sell to VICI and lease back (as lessee), the real estate components of the Forum Convention Center, was not exercised by Caesars prior to the end of the Company’s election period. VICI’s election period expires on December 31, 2028. In the event that VICI exercises the option, the Forum Convention Center would be sold at a price and leased back to CEI in accordance to the terms and conditions of the put-call right agreement, as amended.
The Golf Course Use Agreement between the Company and VICI has a 35-year term (inclusive of all renewal periods), whereby the Company agrees to pay initial annual membership and use fees totaling $14 million, subject to annual escalation provisions similar to those described above in the Regional Lease, as well as certain per-round fees set forth in the agreement.
GLPI Leases
The fair value of the real estate assets and the related failed sale-leaseback financing obligations were estimated based on the present value of the estimated future lease payments over the lease term of 20 years, plus renewal options, using an imputed discount rate of approximately 9.75%.
CEI leases certain real property assets from GLPI under the Master Lease (as amended, the “GLPI Master Lease”). The GLPI Master Lease, encompassing a portfolio of properties within the United States, provides for the lease of land, buildings, structures and other improvements on the land, easements and similar appurtenances to the land and improvements relating to the operation of the leased properties. The GLPI Master Lease, inclusive of all amendments, provides for (i) an initial term of 20 years (through September 2038), (ii) four five-year renewals at the Company’s option, (iii) annual land and building base rent of $24 million and $63 million, respectively, (iv) escalating provisions of building base rent equal to 101.25% of the rent for the preceding year for lease years five and six, 101.75% for lease years seven and eight and 102% for each lease year thereafter and (v) relief from the operating, capital expenditure and financial covenants in the event of involuntary closures.
CEI also leases the real estate underlying Horseshoe St. Louis from GLPI, (the “Lumière Lease”). The Lumière Lease, inclusive of all amendments, provides for (i) an initial term commencing on September 29, 2020 and ending on October 31, 2033, (ii) four five-year renewal options, (iii) annual rent payments of $23 million, (iv) escalation provisions commencing in lease year two equal to 101.25% of the rent for the preceding year for lease years two through five, 101.75% for lease years six and seven and 102% for each lease year thereafter, and (v) certain relief under the financial covenant in the event of involuntary closures.
The Company continues to reflect the real estate assets related to the failed sale-lease back transactions on the Balance Sheets in Property and equipment, net as if the Company was the legal owner, and continues to recognize depreciation expense over their estimated useful lives.
The future minimum payments related to the GLPI Leases, including the Lumière Lease, and VICI Leases financing obligations, as amended, at December 31, 2025 were as follows:
| (In millions) | GLPI Leases | VICI Leases | |||||||||
| 2026 | $ | 115 | $ | 1,254 | |||||||
| 2027 | 117 | 1,275 | |||||||||
| 2028 | 119 | 1,305 | |||||||||
| 2029 | 120 | 1,326 | |||||||||
| 2030 | 122 | 1,346 | |||||||||
| Thereafter | 4,126 | 41,634 | |||||||||
| Total future payments | 4,719 | 48,140 | |||||||||
| Less: Amounts representing interest | (3,675) | (37,328) | |||||||||
| Plus: Residual values | 240 | 893 | |||||||||
| Financing obligation | $ | 1,284 | $ | 11,705 | |||||||
Cash payments made relating to the Company’s long-term financing obligations during the years ended December 31, 2025, 2024 and 2023 were as follows:
GLPI Leases (a) | VICI Leases (a) | ||||||||||||||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||
| Cash paid for principal | $ | — | $ | — | $ | 1 | $ | 1 | $ | 1 | $ | 1 | |||||||||||||||||||||||
| Cash paid for interest | 113 | 112 | 111 | 1,236 | 1,212 | 1,175 | |||||||||||||||||||||||||||||
____________________
(a)For the initial periods of the VICI and GLPI Leases, cash payments are less than the interest expense recognized, which causes the failed-sale leaseback obligation to increase during the initial years of the lease term.
Lease Covenants
The GLPI Leases and VICI Leases contain certain covenants requiring minimum capital expenditures based on a percentage of net revenues along with maintaining certain financial ratios. The GLPI Leases require the Company to maintain a minimum adjusted revenue to rent ratio of 1.20:1.
The Company was in compliance with all applicable covenants as of December 31, 2025.
Lessor Arrangements
Lodging Arrangements
Lodging arrangements are considered short-term and generally consist of lease and nonlease components. The lease component is the predominant component of the arrangement and consists of the fees charged for lodging. The nonlease components primarily consist of resort fees and other miscellaneous items. As the timing and pattern of transfer of both the lease and nonlease components are over the course of the lease term, we have elected to combine the revenue generated from lease and nonlease components into a single lease component based on the predominant component in the arrangement. During the years ended December 31, 2025, 2024 and 2023, we recognized $1.9 billion, $2.0 billion and $2.1 billion, respectively, in lease revenue related to lodging arrangements, which is included in Hotel revenues in the Statements of Operations.
Conventions
Convention arrangements are considered short-term and generally consist of lease and nonlease components. The lease component is the predominant component of the arrangement and consists of fees charged for the use of meeting space. The nonlease components primarily consist of food and beverage and audio/visual services. Revenue from conventions is primarily included in Food and beverage revenue in the Statement of Operations, and during the years ended December 31, 2025, 2024 and 2023, lease revenue related to conventions was $56 million, $51 million and $40 million, respectively.
Real Estate Operating Leases
We enter into long-term real estate leasing arrangements with third party lessees at our properties. As of December 31, 2025, the remaining terms of most of our operating leases ranged from 1 to 15 years, some of which include options to extend the lease term for up to five years. In addition to minimum rental commitments, certain of our operating leases provide for contingent payments including contingent rentals based on a percentage of revenues in excess of specified amounts and reimbursements for common area maintenance and utilities charges. As the timing and pattern of transfer of both the lease and nonlease components are over the course of the lease term, we have elected to combine the revenue generated from lease and nonlease components into a single lease component based on the predominant component in the arrangement. In addition, to maintain the value of our leased assets, certain leases include specific maintenance requirements of the lessees or maintenance is performed by the Company on behalf of the lessees. During the years ended December 31, 2025, 2024 and 2023, we recognized $128 million, $148 million and $166 million, respectively, of real estate lease revenue, which is included in Other revenue in the Statement of Operations. Real estate lease revenue includes $60 million, $62 million and $68 million of variable rental income for the years ended December 31, 2025, 2024 and 2023, respectively.
Maturities of Lease Receivables | |||||
| (In millions) | Operating Leases | ||||
| 2026 | $ | 62 | |||
| 2027 | 58 | ||||
| 2028 | 53 | ||||
| 2029 | 49 | ||||
| 2030 | 45 | ||||
| Thereafter | 665 | ||||
| Total | $ | 932 | |||
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 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.