Thursday, September 27, 2018

Caesars Embarks on Domestic and Global Expansion with Post-Bankrutpcy Strategy

Casino News Daily
Caesars Embarks on Domestic and Global Expansion with Post-Bankrutpcy Strategy

With a market capitalization of $7.07 billion an multiple properties across the United States, the United Kingdom, and Egypt, among other countries, Caesars Entertainment Corp. is one of the world’s largest gaming and hospitality companies. Caesars climbed out of a lengthy Chapter 11 bankruptcy last fall and has since then focused on expanding both its domestic operations and its international presence as part of its strategy to further establish itself in the casino gaming, hospitality, and entertainment fields.

In the months preceding the company’s emergence from bankruptcy, its CEO, Mark Frissora, said that geographical expansion and product diversification would be one of its main points of focus once it puts its bankruptcy case behind.

It has been nearly a year since the closure of the bankruptcy proceedings, and the company has shown that it has been working hard to deliver on that strategy.

In its domestic market, Caesars most recently broke ground on a $375-million conference and convention center in Las Vegas. The 550,000-square-foot Caesars Forum is slated to open doors in 2020 and will offer 300,000 square feet of flexible meeting space, including two 110,000-square-foot pillarless ballrooms and a number of other convention facilities. The property will also have a direct access to hotel rooms at Harrah’s Las Vegas and The LINQ as it will be connected to the two properties via a skybridge.

Late last year, Caesars broke the news that it would expand its presence in Indiana, an important casino market, through the acquisition of Centaur Holdings LLC for the total amount of $1.7 billion. The deal was closed in mid-July and saw Centaur’s Hoosier Park Racing and Casino in Anderson and Indiana Grand Racing and Casino in Shelbyville be added to Caesars’ existing portfolio of properties in the state. The company already owned and operated the Horseshoe Hammond and the Horseshoe Southern Indiana casino properties prior to the transaction.

The company announced that it would invest $50 million to upgrade its two new properties and broke ground on a $85-million expansion of its Horseshoe Southern Indiana casino that would also involve the property’s relocation to dry land.

International Casino Expansion

It has also become clear that Caesars has appetites for expanding its international casino gaming portfolio. Japan has been one of the countries targeted by the major gambling and hospitality company. The country recently legalized casino gambling within its borders. Earlier this summer, Japanese lawmakers also approved an essential bill that set out the principles under which the nation’s nascent casino market would be regulated.

It is believed that Japan could quickly become one of the world’s top three gambling markets once its casinos open doors. The government agreed to issue up to three gaming licenses to interested operators and some of the world’s largest gambling companies have already kicked off the race for these, even though they are not expected to be granted before 2019. Caesars has been one of these companies. However, it is facing heavy competition from fellow Las Vegas operators such as MGM Resorts International and Las Vegas Sands, as well as from prominent Asian companies, including Melco Resorts & Entertainment and Genting Group.

It has also emerged that Caesars is eying participation into an €8-billion project for a massive integrated resort at the site of the former Ellinikon International Airport near Athens, Greece. The company’s name has been mentioned in relation to the mega-scheme for more than a year now. The integrated resort development will feature multiple accommodation, food and beverage, and entertainment facilities as well as a casino, the sole investment for which is expected to reach €1 billion. The whole complex will be Europe’s largest one of this kind.

The Greek Gaming Commission recently invited interested parties to submit comments and proposals in relation to the grand project ahead of the official opening of the bidding process and Caesars was one of the companies to lodge its interest in the development, thus confirming what have previously been only reports about its interest to take part in the scheme.

International Non-Gaming Expansion

Caesars has also announced that growing its non-gaming business would represent a core part of its growth strategy. Earlier this spring the company announced that it would open two non-gaming resorts in major tourist draw Dubai.

The two properties will be part of the Bluewaters Island development, managed by Dubai’s state-run Meraas Holding. They will have 479 hotel rooms and multiple food and beverage and entertainment facilities. Caesars Palace Bluewaters Dubai and Caesars Bluewaters Dubai, as the two non-gaming resorts are branded, are both slated to open doors in the fourth quarter of the year.

It also emerged this spring that Caesars was planning to open a non-gaming beachfront resort in Puerto Los Cabos in Mexico. The Caesars Palace-branded property will feature 500 hotel rooms, a 40,000-square-foot convention center, three restaurants, a spa and wellness center, and a number of other facilities.

Caesars’ local partner Grupo Questro is expected to break ground on what would be a $200-million development in the first half of 2019.

As it can be seen, the Las Vegas gaming and hospitality giant is looking to grow some of its major domestic brands, including Caesars Palace, internationally and beyond casino gambling. The global gambling and hospitality fields have become extremely competitive and keeping pace is a challenging task for any involved company. It is yet to be seen whether Caesars’ strategy to penetrate new markets and diversify its core operations would help it blunt the heavy competition.

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