So, was I surprised by the withdrawal of Caesars Entertainment, formerly Harrah's, was out of the Massachusetts Casino Sweepstakes? Not really.
When Caesars bought up 1/3 of the Las Vegas Strip, they became even more in debt than there were. Wall Street analysts have suggested that the U.S.’ largest casino operator's debt could be headed down a path of debt worse than the entire city of Detroit. Caesars carries a gaming industry high of $23.5 billion in long-term debt on its books!
The world's top casino market is now Macau, China. Guess who can't afford to compete with Sands Corp., Wynn, and MGM? Yup - Caesars! Not competing in this lucrative market is absolutely keeping them in debt - besides poor choices in privatizing it's business and a reputation for not being able to keep up the properties it already owns.
To make revenue matters worse, the company is securing new debt with some of its newer Strip projects, including the 668-room Octavius Tower at Caesars Palace and the under-construction $550 million Linq development, which includes 300,000 square feet of outdoor retail, dining and entertainment attractions, and is anchored by a 550-foot High Roller observation wheel, embraces a belief that adding non-gaming elements offers a vehicle to grow company revenue outside of the casino.
And now, Suffolk Downs shook up the Massachusetts casino race announcing that, as a result of a Massachusetts Gaming Commission background investigation into its partner, Caesars Entertainment, it was dropping the gaming giant from its bid to win the single casino license the state will issue for the Boston area. But why? Indications were that there were a variety of issues, but the biggie seemed to be unsavory ties to a mystery unsavory character involved in a recent deal Caesars made with the Gansevoort Hotel Group, a boutique hotel outfit out of New York, to open a new hotel in Las Vegas.
Meanwhile, Suffolk Downs intends to maintain its current vision and design for the project, which it has presented at numerous neighborhood meetings. Rumor has it that Hard Rock already has some background with Suffolk Downs officials dating back to connection in Tampa at the Hard Rock Seminole Casino.
So, Wynn's biggest competition is gone, with only Foxwoods and maybe Suffolk Downs finding a partner left for the one Boston area casino license.
It seems to be a royal mess for the old Harrah's Corp. In my opinion, Massachusetts is better off without them. I'm still staying with my original prediction - MGM in the west and Wynn in the central.
That's all for now.
Binbin
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