Over the past decade or so, there have been many rumors regarding the future of Caesars Entertainment. Even after the company, then known as Harrah’s, purchased the World Series of Poker back in 2004, there was some thought that the company would be sold and the WSOP would be either sold as a separate entity or ended altogether. Although none of those things has happened, there are new rumors regarding the future of Caesars Entertainment which portend of its sale once again.
Where There’s Smoke…
According to reports from several media outlets, Caesars Entertainment is supposedly on the auction block, with two powerful entities actually tying their names to the potential sale. According to Josh Kosman of the New York Post, Carl Icahn, who currently owns 28.5% of the casino conglomerate and is the largest shareholder in the company, has battled with others in the organization for a sale and/or bringing in another partner to invest. Kosman reports that Eldorado Resorts, the owners of the Tropicana in Atlantic City, have had a cursory look at the financial records, but another player may be entering the game.
Tilman Fertitta, the owner of the Houston Rockets and the Golden Nugget in downtown Las Vegas and the cousin of Station Casinos owners Lorenzo and Frank Fertitta, has been granted access to the financial records of the company. This is a big move, according to Kosman, because Fertitta was denied access to this same information in late 2018. Caesars, however, declined to make any comments for Kosman or other news outlets.
How Much is at Stake?
To say that there are some intricate financials to go through would be an understatement. Caesars Entertainment is valued at $5.6 billion through its stock holdings on the NASDAQ exchange, but there is roughly $18 billion in debt that the company has built up. It’s resulting valuation of $23.6 billion, therefore, would give even the deepest pocketed billionaire a moment’s pause before jumping in.
Fertitta isn’t one to jump in without knowing all the angles. Fertitta purchased the Houston NBA franchise in 2017 for $2.2 billion and already owned the five Golden Nugget properties across the States of America. His net worth is estimated at $4.9 billion by Forbes Magazine, placing him at #394 in their annual list of the top billionaires in the world and at #158 in 2018 in Forbes’ ranking of the richest people in the States of America.
What About the WSOP?
While these billionaires aren’t asking this question, there’s tens of thousands of poker players that might be. The plans are already in place to have the 50th celebration of the game of poker at the Rio All Suites Hotel and Casino in Las Vegas beginning next month, but a sale of the company – or a move by the company to eliminate some properties – could put the future of the WSOP in a tenuous spot. The Rio, due to its off-Strip location, has long been a thorn in the side of Caesars Entertainment (and was during its days under Harrah’s ownership) and there are some rumblings that the property could be sold and/or demolished to help the balance sheet.
If the Rio were to be sold/demolished, would Caesars move the biggest game in poker to another casino? Caesars Palace would be a logical choice, but the venerable series could also be sold to another entity. If this were to occur, what changes would take place, or would the WSOP even continue?
Before Panic Sets In…
This isn’t the first time that reports of Harrah’s, Caesars Entertainment, the Rio or the WSOP have been bandied about.
In 2013, the stories were passed around the poker community about how PokerStars, looking for access to the newly-opened Nevada online poker industry, was going to buy the Rio to have access to a gaming license in the state. The rumors turned out to be true, but PokerStars didn’t go through with the deal and instead concentrated on moving into the New Jersey market.
In 2014, the late Robin Leach actually stated that “a major off-Strip hotel” had been sold for a reported $400 million. While many believed that the property in question was the Rio, Caesars never commented on Leach’s statement and still owns the home of the WSOP. It is also noteworthy that no “off-Strip” property turned out to switch hands despite Leach’s reporting.
The rumors that are abounding could be just that…rumors. But when billionaires are looking at shuffling their money to make more – and when those names can be put on the deals – then it might be time to look closer at the rumors and determine whether they are true or not.