Will Casinos Die at Caesars Entertainment? — Market Mad House
The conventional wisdom is that coronavirus will kill or devastate the casino industry. In July, Caesars Entertainment (NASDAQ: CZR) proved that thesis with a desperate merger with Eldorado Resorts.
Eldorado Resorts bought Caesars Entertainment Corp (NASDA: CZR) for $17.3 billion on 20 July 2020. Marketwatch claims the resulting company, which they will call Caesars Entertainment, will be the world’s largest casino operator.
The new Caesars could operate over 55 casinos in 16 US states, Marketwatch claims. In addition, the new Caesars will operate in Egypt, the United Kingdom, Canada, Dubai, and Macau.
Caesars is the World’s Largest Casino Operator
However, Caesars will sell casinos in Kansas City, Missouri, South Lake Tahoe, California, and Shreveport Louisiana, Marketwatch predicts. Additionally, Caesars could sell casinos in Evansville, Indiana, Elizabeth, Indiana, and Hammond, Indiana. Caesars will also sell Bally’s Atlantic City.
Consequently, Caesars will operate some of America’s best known casinos. Caesars casinos in Las Vegas will include; Caesars Palace, the Flamingo, the Rio off the Strip, Paris Las Vegas, Planet Hollywood, Harrah’s Las Vegas, the Linq Hotel, Harrah’s Las Vegas, Bally’s, and Cromwell.
Moreover, Caesars will operate three casinos in Atlantic City; the Tropicana, Ceasars, and Harrah’s. Eldorado Resorts owned 26 casinos in 12 states before Caesars acquisition.
What Value Does Caesars have?
Mr. Market paid $41.32 for Caesars Entertainment (CZR) shares on 14 August 2020. Unfortunately, all El Dorado and investors are buying could be empty hotels and slot machines that gather dust.
I think Caesars sold out because coronavirus killed its business. For example, Caesars Entertainment reported a -$123.18 million quarterly operating loss on 31 March 2020. That operating loss grew to -$78.33 on 30 June 2020.