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Overview: Caesars Entertainment and its operating entities

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Caesars Entertainment

Caesars Entertainment Corporation (CZR) owns, operates, and manages casino entertainment facilities including land-based casinos and riverboat or dockside casinos. The company, or CZR, operates its casinos primarily under the Caesars, Harrah’s, and Horseshoe brand names. CZR also operates hotel and convention space, restaurants, and non-gaming entertainment facilities. Plus, the company owns and operates an online gaming business that provides various real money games in Nevada, New Jersey, and the United Kingdom. To learn more, read this overview of Caesars Entertainment.

Part-1

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Operating entities

CZR is a holding company consisting of three main entities:

  • Caesars Entertainment Operating Company (or CEOC)
  • Caesars Entertainment Resort Properties (or CERP)
  • Caesars Growth Partners (or CGP)

CEOC is a majority-owned operating subsidiary of CZR, while CERP is wholly owned. CZR holds only a variable economic interest in CGP. The above chart shows that 60% of CZR’s year-to-date sales are derived from CEOC, while only 24% and 16% are attributable to CERP and CGP, respectively.

CERP and CGP have outsized exposure to Las Vegas. CGP serves as the primary growth vehicle for CZR’s online and offline distribution channels. CEOC remains heavily leveraged.

Geographical presence

CZR has grown through the development, expansion, and acquisition of resorts. The company now operates 50 casinos in 13 US states and five countries. CZR has no exposure to Asian markets, while casino companies Las Vegas Sands Corp. (LVS), Wynn Resorts, Limited (WYNN), and MGM Resorts International (MGM) respectively derive 80%, 71%, and 34% of revenues from Asia. ETFs such as the Consumer Discretionary Select Sector SPDR Fund (XLY) help investors gain diversified exposure to these casino companies.

In this series, you’ll learn a great deal about CZR:

  • why CZR’s revenues increased in 3Q14
  • why CZR’s property EBITDA decreased despite increased revenues
  • about CZR’s cost structure
  • why CZR’s share price surged over 45% in the two days following the release of its 3Q14 results
  • why CZR’s rising short-term interest could pose a threat to the short sellers
  • why CZR laid off 1% of its employees
  • why CZR is preparing to file for Bankruptcy for its largest unit, CEOC,
  • why CZR is looking to restructure CEOC into a REIT
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