By now, most of us have heard about the rumors of Ceasar’s Casino going bankrupt. The newsletter of more than 64,000 members, “Openings and Closings in Las Vegas,” recently prevented customers from booking or investing in Ceasar’s Entertainment Corp. More precisely, Bill Mandel said in this newsletter that “in an abundance of caution, this newsletter advises you not to deposit any funds (deposits for hotel reservations, deposits in the cashier’s cage or not redeeming casino chips, etc.), in … Caesars hotels, until the situation at Caesars becomes clearer.”
More than just a business matter, I have heard many people and customers of this GREAT casino express concern of losing a place that feels like a Vegas monument. It doesn’t represent that much of a concern for its customers, but a fear of a true sentiment of loss if this event occurred.
Before we get dramatic, I have gathered information from different sources and found out the truth about these rumors. Or at least, what is well founded up until this point in time. The good news is that gaming experts are saying that if this company would file for bankruptcy, it would not affect the hotel or casino’s customers.
“I’m struggling to remember any time when a gaming company’s bankruptcy filing directly affected customers,” said David Schwartz, director of the Center for Gaming Research at UNLV. “It would be a problem for shareholders but not customers.”
This company is known for never giving declarations on rumors and speculation stated by the media or its competitors and it seems that these rumors had already been in the air for months.
According to the Examiner, “in the company’s most recent earnings report in July, Caesars noted that it had bought back $275 million in debt and that its financial strategy included beefing up its product offerings in Las Vegas and entering the Maryland casino market, breaking ground on a property on Baltimore’s harbor. The company also cut spending on marketing at some of its less profitable properties. Caesars also is expected to generate new revenue when its online poker product, themed with its World Series of Poker brand, is licensed.”
Schwartz also said it’s evident that Caesars is looking to grab a larger piece of wallet share in Las Vegas with its Linq project, due to open early next year. Linq includes a pocket of restaurants and attractions in the heart of the Strip, anchored by the 550-foot High Roller observation wheel. He said many things can change for the company between now and the January 2015 securities maturation.
And finally, the Examiner also states that “investors have shown confidence in the company since its newest financial strategy was rolled out. The company’s stock price fell to $12.25 shortly after April, but had risen to $21.84 by the end of August.”
What’s are your thoughts on this matter?