News broke this week that Caesars Entertainment, the gambling stalwart that includes such prestigious properties as Caesars Palace Las Vegas, Bally’s Las Vegas, the Rio All Suite Hotel and Casino, and a laundry list of others, saw its credit rating downgraded by Fitch Ratings from stable to negative. The news has some wondering if Caesars is going to have to unload some of its trophy assets due to financial struggles, with a post on Carbon Poker’s blog speculating that one of its prize ponies, the WSOP, could be headed for the auction block.
Fitch Ratings is a company that reports on the financial health of companies, and the downgrade to negative came in the wake of shocking $241.7 million second quarter losses. Another factor in Fitch’s move is Caesars’ massive $19.9 debt load. Facing mounting financial concerns, Carbon’s blog notes that Caesars is a long way from liquidity, and will possibly have to begin offloading some of its more valuable assets as a means of shoring up the company’s struggling finances.
According to Reuters, in addition to the liquidity and debt analyses, the Fitch report also remarks upon upcoming company projects as well as key market outlooks, and recovery analyses. The full report and a list of frequently asked questions about Caesars Entertainment can be found on Fitch Rating’s website.
The WSOP is without question the highest profile and one of the most respected poker tournaments in the world. It has been around since 1970, having started at Binion’s Horseshoe Casino, and has been operated by Caesars since 2005. It is now hosted at the Rio and features 61 separate events that attract over 10,000 players annually. The Main Event is one of the biggest, if not the biggest, annual poker event and attracts heavy media coverage. In previous years, players have been able to win their seats by playing online poker, however since the passage of the UIGEA in 2006, online poker rooms have been banned from directly purchasing seats to the event.
If Caesars is forced to sell off the WSOP, it will be a major blow to the brand. Being associated with such a highly respected event brings a lot of media attention and attracts players of all scopes, not to mention bringing a tremendous amount of foot traffic to the Rio. In its currently embattled financial state and facing tough roads ahead, no doubt Caesars is closely monitoring online poker regulation, which is in the works on the state level in Nevada. Federal online poker regulation remains mired in questions and mystery, with some talk that there might be movement in Congress during the upcoming lame duck session to take place following the November elections. Certainly a major operator like Caesars is looking to cash in should federal regulation occur, and it looks like Caesars is going to need it.
