Which Property or Properties Should the new Caesars Sell?

Being a Caesars Entertainment person who stays mostly at Flamingo, but also at Bally's and Planet Hollywood (all comped), I'm very curious which CZR casinos will be sold by the new owner Eldorado. My guess is Harrah’s, Flamingo, Bally’s, and Rio. Do you know or have a guess?

Also, here's your link to the new poll that, not coincidentally, is on which Las Vegas property or properties you think the new merged Eldorado Resorts-Caesars Entertainment should sell.

[Editor's Note: This answer was written by our Stiffs & Georges blogger David McKee and is his opinion on the matter. You can vote your own opinion in the poll that launches today; see the link at the bottom of the answer.]

Only Eldorado CEO Tom Reeg knows and perhaps not even he. In an interview he said, “I think that there’s more Strip exposure than we would need to accomplish our goals with our regional data base. So I would expect that we would be a seller of a Strip asset, but that decision has not been made.”

In other words, while multiple Strip casinos had been previously speculated to be in play, now it’s down to one — and maybe not even that.

Since the Eldorado name will be going away in favor of the Caesars brand, one can safely assume that Caesars Palace is sacrosanct. Ditto the company’s beloved Linq and Cromwell, not only for their own newly revamped sakes, but because the Linq Promenade plays off them. However, due to its age and general dowdiness, I don’t think Harrah’s Las Vegas is going on the market. It would probably not draw a high cash multiple, despite being on the Strip. As for the Flamingo, Caesars has put a fair amount of capital maintenance into that property and selling it would create an awkward gap between the Linq and Cromwell.

Selling Bally’s is an interesting proposition: It shares a physical plant with Paris-Las Vegas (enabling then-Harrah’s Entertainment to save a boatload on construction costs back in 1999), so it would be a both-or-nothing proposition for an interested buyer.

That leaves us with Planet Hollywood, the casino around which the most speculation has raged. It has a brand name, has been thoroughly purged of its ill-advised Arabian Nights theme (it opened as the Aladdin), and comes with two major amenities in the form of the Miracle Mile Shops and Zappos Theater. It’s probably Planet Hollywood that Phil Ruffin (owner of Treasure Island) and Tilman Fertitta (CEO of Golden Nugget) are thinking of when they publicly hanker for a castoff Caesars resort.

One property of which Reeg might well want to be rid, but which Ruffin has already dismissed, is Caesars’ red-headed stepchild, the Rio. Several times during the Gary Loveman regime, it was mooted to be on the selling block, but a reputed $500 million price tag seems to have scared off prospective suitors.

Outside of Las Vegas, Horseshoe Baltimore has been a disappointment, but Eldorado will likely want to keep it, lest it have no access to that market. In Atlantic City, however, a combined Eldorado/Caesars would have four casinos, which would be one too many. Eldorado already has the market’s second-strongest casino, the Tropicana Atlantic City. Bolstered by a new convention center, high-performing Harrah’s Resort would also be a keeper. That leaves volatile Caesars Atlantic City and grind joint Bally’s. Reeg is likelier to keep brand-name Caesars and shut down Bally’s, with its older physical plant, much as Loveman did to the Showboat.

Eldorado is already heavily concentrated in Reno, with three interconnected hotels, making Harrah’s Reno a probable castoff in any deal. And while Eldorado is unlikely to face antitrust concerns in Missouri, we wouldn’t have been surprised if it kept Harrah’s North Kansas City and sold its Isle of Capri-branded riverboat. Indeed, that’s exactly what Eldorado did, just days ago. Similarly, between the Eldorado Shreveport, Horseshoe Bossier City and Louisiana Downs, one of those Shreveport-area assets might be up for grabs, perhaps the low-grossing racetrack. In short, we expect Eldorado to trim around the edges (as in its recent sale of Lady Luck Vicksburg) and cling tightly to big-ticket assets, perhaps with one or two prominent exceptions.

Thank you, David, for your observations.

QoDers, you can weigh in with your own observations by clicking this link to the new poll on which Las Vegas property or properties the new merged Eldorado Resorts-Caesars Entertainment should sell.

No part of this answer may be reproduced or utilized in any form or by any means, electronic or mechanical, without the written permission of the publisher.

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Deke Castleman Jul-23-2019

Yes, Candy ...

I didn't want to ruin the surprise yesterday, but you nailed it, as always.

Kevin Lewis Jul-24-2019

Does it matter??

From the perspective of us poor little ol' players, do we or should we care about which particular immense megablob casino corporation owns the Golden Commode or Sleazeball's Palace or whatever? Will it make any difference in the tsunami of ripoffs that has turned Las Vegas into a giant swindle?

I mean, we might care if one megablob corporation treated its customers better than the others; then we might at least root for that one. But the opposite is true: the big casinos companies COLLUDE. Every ripoff, from 6:5 BJ to resort fees to parking fees, has been almost simultaneously adopted by all of them. They work together. The result is that you get the same horrible experience when visiting ANY Vegas Strip property.

Now, if some maverick entered the market and started offering bargains--even relative ones, such as rooms for only $1,500 or a $75 buffet (OK, I'm exaggerating a tad), that would be GREAT. Until the casinos had that guy whacked, of course.

Kevin C Jul-24-2019

Properties included?

I thought I remembered reading that Caesar's Palace itself wasnt included in the deal. Perhaps that was an early version of the story.

I do, however, agree somewhat with Kevin Lewis's comments. It certainly does seem like the big corporate owners are working together and always against the customer. We used to go there every year but haven't in the past three and dont anticipate a return in the foreseeable future.

Jackie Jul-24-2019

Which one?

The property that goes will have met several factors.  Cost of updating, market share, and demographics.  Each factor intertwined with the others.  The point everyone misses is that all businesses tune themselves to a certain targeted customer group.  In other words, the generation of people with the most money to blow.  Older generations like Kevins were once courted and seduced but now tossed aside like an old shoe for a younger generation that can be pillaged and robbed.  Keep this in mind as you guess which property winds up sold.

Sandra Ritter Jul-24-2019

Thanks

Thank you Deke. So happy I can still stay at the Flamingo. (I should have considered it's connection to the Linq Promenade.)

Eileen Jul-24-2019

Divesting of Caesars Entertainment Properties

As a low roller I concentrate most of my gambling dollars at Caesars properties to get to a level where you don't pay resort fees or parking on that once-a-year occasion where you allow your husband to drive you to Vegas, vice flying, so he can eat at nice restaurant and you can take advantage of the Caesars Celebration Dinner certificate.  When the slurping sound of the slots gets too loud at one casino I can just go next door to another Caesars property.  My vote was to only divest of Rio something they've been trying to do for a long time.  I almost always stay at Flamingo because it's so center strip.  But even though they've put a lot of money into it, they just need a gambling floor total makeover. I'm sure there are plenty of people with some really good suggestions on how to do that.  Flamingo just doesn't look modern! I would think PH generates more revenue than some of the other properties and has a good variety of machines. I'm 71 but like the vibe.  I'm not dead yet!

O2bnVegas Jul-24-2019

Biloxi and Lake Tahoe

Harrah's Gulf Coast (Biloxi) is certainly forgettable.  

I will depend on smarter folks here who know more (and post) about mergers and acquisitions and sell-offs, that kind of stuff before I vote. Harrah's Reno has to be in the bulls eye...what a dump, though very nice staff.  BUT, once Reno goes, I assume there go the offers involving Lake Tahoe (Harrah's/Harvey's).  Fly to Reno, shuttle to Lake Tahoe.  Wonder what will happen to them?

That said, we visited Silver Legacy once, which was "interconnected" with Eldorado.  Talk about customer treatment!  We were guests of a Silver Leg regular, and did her Host make us all feel like high rolling regulars!  Don't know if SL is hooked up business wise with Eldorado or not.  Both were gorgeous casinos and liked their slots/VP a whole lot.  My point being there is hope for good things when Eldorado plants flags in Las Vegas.

Kevin Rough Jul-24-2019

Some points

CZR doesn't own Horseshoe Baltimore outright.  It is owned by a corsortium of which CZR is only a part.  CZR also recently put a lot of money into Bally's Atlantic City, so I would think Caesars would be the casino they let go.  And Miracle Mile Shops has separate ownership from Planet Hollywood.  Miracle Mile Shops is owned by a partnership of Miller Capital and CalPERS.

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