With bankruptcy nearly over, Caesars exec talks up growth
New companies and subsidiaries of Caesars Entertainment Corp. got the green light Wednesday from the state gaming regulators to be licensed in Nevada, a key step toward the company’s emergence from bankruptcy protection.
August 9, 2017 - 11:21 am
Now that Caesars Entertainment Corp. is well on its way toward emerging from bankruptcy, company officials have affirmed significant growth plans are in the works.
Speaking Wednesday to members of the state Gaming Control Board in Carson City, President and CEO Mark Frissora said the new Caesars not only would be growing in Las Vegas but at Lake Tahoe and Laughlin as well.
“Over the next two years, you’re going to see a lot of development projects that are going to create a lot of new jobs in Las Vegas,” Frissora said in testimony before the board.
The board voted unanimously to recommend approval of the registration of subsidiary companies and LLCs and the licensing and suitability of several corporate officers, executives and key employees.
The recommendation will go to the Nevada Gaming Commission for final approval on Aug. 24. Caesars still must receive regulatory approval from gaming authorities in Missouri and Louisiana, scheduled in September.
Final emergence from bankruptcy protection is expected in early October.
Board members spent nearly 1½ hours questioning Tim Donovan, Caesars’ general counsel and compliance officer, chief financial officer Eric Hession and Frissora and deliberating about the complex corporate structure developed in the company’s Bankruptcy Court-approved restructuring.
Under terms of the bankruptcy emergence plan, outlined in an 839-page registration statement filed with the Securities and Exchange Commission, Caesars would separate nearly all of its U.S.-based real estate property assets from its gaming operations. Caesars Entertainment would continue to own and manage the gaming operations and the property assets would be held by a newly created real estate investment trust owned by some creditors.
Caesars filed for Chapter 11 bankruptcy protection in January 2015 and after two years of negotiations among creditors, Judge Benjamin Goldgar of the Northern District of Illinois in Chicago approved the bankruptcy plan in January 2017.
Company shareholders overwhelmingly approved a merger in two separate votes late last month.
Control board members, who didn’t have to approve the bankruptcy plan but instead licensed and registered the new entities, had no objections in their hearing, but questioned executives to fully understand the complex corporate restructuring.
Total Rewards growth
Frissora said with the bankruptcy action nearly complete, the company has been able to focus on growing its customer base. He said the company’s Total Rewards loyalty program has grown 7 percent in its VIP segment since last year and that it’s all new customers.
As a result, Frissora affirmed that the company would develop 90 acres in various locations over the next two to three years. He said even buying up Nevada competitors is a possibility.
He said the company would focus on seven acres in front of its flagship Caesars Palace property as well as 40 acres east of Bally’s and Paris Las Vegas.
“We don’t have a master plan that’s fully baked right now, we’ll be presenting that to the new board, but it’s going to be activated,” Frissora said of the acreage near Bally’s and Paris. “We have lots of good ideas for that property, it’s just solidifying the plans. Right now we’re using a movie studio as part of those plans.”
The company has opened a 48,000-square-foot soundstage there and has been surprised with high demand to use the facility. Frissora said the company has always been a friend to Hollywood, opening properties for the filming of motion pictures like “The Hangover” and “Rain Man,” a big-screen marketing tool that attracts guests.
Currently, the television game show “Who Wants to Be a Millionaire?” is taped at the studio.
Frissora also said the company is looking to develop land east of The Linq Promenade into a 300,000-square-foot convention facility that would lead to adding 300 to 400 new jobs when completed. The meetings and convention site would serve nearby Harrah’s, Flamingo and The Linq Hotel.
Contact Richard N. Velotta at email@example.com or 702-477-3893. Follow @RickVelotta on Twitter.