[toc]Caesars Entertainment is just a few steps away from putting its bankruptcy in the past after two years of Chapter 11 proceedings.
The company recently cleared a hurdle when the New Jersey Casino Control Commission approved the company’s plan for restructuring.
Caesars Entertainment merging with Caesars Acquisition Corporation
In January, courts approved Caesars’ proposed restructuring agreement. The company shed $10 billion in debt by separating its holdings into two distinct categories:
- Caesars Entertainment, the parent company, which is merging with Caesars Acquisitions Corp (CAC) to consolidate the company’s brick-and-mortar casino and hotel assets into a single company
- Caesars Entertainment Operating Inc., which is a subsidiary that consists of Caesars’ gambling operations
“Upon CEOC’s emergence, we will be positioned to strengthen our financial and operational performance by pursuing new opportunities to invest in and expand our brands and business,” Caesars Entertainment President and CEO Mark Frissora said after the restructuring received approval in January.
CAC launched in 2013 as part of a business restructuring. Then, CAC and Caesars partnered to launch Caesars Growth Partners. That company purchased some of Caesars’ more lucrative casino properties, including The Linq and The Cromwell in Las Vegas.
The companies announced the CAC and Caesars merger at the end of 2014. The court approved the restructuring contingent on finalizing that merger and approval from necessary local gaming boards.
The company hopes to finalize the restructuring in the second or third quarter of this year.
NJ Casino Control Commission gives Caesars the OK
While the restructuring gets finalized, Caesars is also securing approval from necessary gaming regulation groups. The company got that from the NJCCC this week.
With the split into real estate and casino operation companies, licensing comes into question. The commission approved a plan where the real estate company will not need its own casino license. However, it will need to obtain a Casino Service Industry License.
Matthew Levinson, the commission’s chairman, expressed hope about Caesars’ future in New Jersey:
“After a decade of decline, Atlantic City’s casino industry is turning around. It is my hope that when the reorganization process is complete, Caesars and Bally’s will be able to focus on growing their business just like other operators in New Jersey.”
Nonetheless, Levinson did warn that the commission is just a step in the process. In actuality, Caesars is not even good to go in New Jersey yet. Other groups, including the Division of Gaming Enforcement, will need to sign off on the restructuring as well.
NJ online casinos remain under Caesars’ control
Part of the reason Caesars is closer to financial stability is last year’s $4.4 billion sale of the bulk of Caesars Interactive Entertainment (CIE). A Chinese consortium of investors purchased the social and mobile gaming portion of CIE, including the highly successful Playtika social gaming company.
Some CIE assets remained with Caesars though. Both the World Series of Poker (WSOP) and the company’s real-money gaming ventures remain with the casino company. Since Playtika and those assets comprise the majority of CIE, Caesars considers it a discontinued operation in its financial reporting.
In other words, New Jersey online gambling ventures WSOP.com, Harrah’s Casino, and Caesars Casino all remain under Caesars’ control. These New Jersey online casinos continue to boost Caesars’ performance in the state.