No wonder Caesars are eager to get online

One of Caesars Entertainment's many casino properties, Caesar's Palace Las Vegas

Casinos in the US just don’t seem to be the fantastic money-makers that they used to be.  Just ask management at Caesars Entertainment Corp – the US’ and world’s largest casino company.

Read their 2011 investor presentation and it’s hard not to be impressed with the sheer scale of this gaming enterprise…

  • No.1 or no.2 market share in almost every major US casino market;
  • 52 casinos in 7 countries;
  • 42,000 hotel rooms and suites;
  • 3.2 million sq ft of casino gaming space;
  • Brands including Caesars, Harrah’s, Bally’s, Paris (Vegas), Rio, Horseshoe, Grand Biloxi, Planet Hollywood, Flamingo, Imperial Palace, World Series Poker, London Clubs International.

That’s the good stuff.

The not-so good stuff is that they lost around $200 million in the December 2010 quarter, they have a debt that would worry a small African nation (over $20 billion) and the markets that they are leaders in, primarily Atlantic City and Las Vegas, are still nowhere what they used to be (Atlantic City down 30% on 2006 peak, Las Vegas still stagnant).

Also, unlike rivals L.V. Sands and Wynn Resorts they aren’t plugged into the burgeoning Singapore or Macau markets.

The investor presentation does contain plenty of very promising phrases like, “Clear runway“, “Poised for a recovery“, “Synergies across multiple brands“, and my personal favorite,  “Robust development pipeline“.  But despite these, you can’t help but sense that management are kind of desperate to get a US licensed online casino up and running quick smart.

That’s also the feeling you get when you consider how they’ve been positioning themselves with regard to online gambling strategy and policy debate. And in view of the above, I can see why.

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