Rumors about Caesars Entertainment filing for chapter 11 bankruptcy protection gets louder every day. It’s easy to poke fun at a business failing but the ramifications from filing for bankruptcy can be good for both Caesars and casino customers. Read chapter 11 details here, you can read about more debt restructuring here and you can read about their unrealistic projections for Suffolk Downs here.
I want to look at the day-to-day operations that affect me and people like me. When/If Caesars files for bankruptcy they’ll be forced to deal with their outstanding debt problems. The easiest way for them to pay down their debt will be to sell off some of their assets.
Some of the assets that may be sold include Bally’s and Showboat in Atlantic City. These properties have long been rumored to be on the market for years but they may have to finally pull the plug to get some quick cash.
Las Vegas may see Caesars shed a combination of Bally’s, Paris and Rio. I’d be surprised if Paris was a sold but it’s one of Caesars most valuable non-core Las Vegas hotels and they need cash. I think Flamingo and Harrah’s are too close to The Linq and The Quad to be shed. These properties give Caesars a great chance of capitalizing on the traffic in the area.
I’m not sure about Caesars properties in other markets but you’d have to imagine a few of those will go too. I’m more focused on AC and LV but you probably know that already.
By shedding some properties in AC and LV Caesars will be able to focus on creating a better value for their customers at the properties they still own. In theory a leaner staff would focus on housekeeping and maintenance while corporate focused on creating a better product for the customer.
Additionally by selling properties in each market Caesars will bring in more competition. Competition always benefits the customer. Increased competition will force all hotel operators in each city to be on their toes to stay ahead. Again, that’s theory.
Not only will increased competition in Atlantic City and Las Vegas provide better casinos and hotel experiences but they will also add new players clubs that would link other cities and casinos throughout the United States with Atlantic City and Las Vegas. The new customers will benefit all casino operators – not just the property owners bringing in the customers.
When all is said and done I envision Caesars having the potential to come out of bankruptcy a tighter company able to provide more value for their casino customers. I also envision increased competition in Atlantic City and Las Vegas which will benefit casino customers by cleaning up old properties and offering new players club reward opportunities.
Even though it’s embarrassing it looks like Caesars filing for bankruptcy may be a win-win.
Note: Caesars hasn’t filed for bankruptcy, this is just speculation for when/if they do.