More trouble for Caesars; Slot routes corrode casino revenues

Caesars Entertainment will soon have a new unsecured creditor — Uncle Sam. The company is trying to negotiate a settlement with the Financial Crimes Enforcement Network. The tab for making things right with The Man could run to $20 million and Caesars isn’t out of the woods yet: a federal grand jury probe into the company continues. However, “Uncle,” as he’s referred to in The Friends of Eddie Coyle, might be lucky to collect a dime of that $12 million-$20 million. As the newest unsecured creditor, the Treasury Department takes a spot at the back of the long line of people trying to get blood from the turnip that is Caesars. Clark County finds itself in a similar pickle, stuck with the bill for burying unsightly power lines and improving our view of Caesars Palace and The Cromwell.

Speaking of Caesars, if The Linq is the company’s idea of a middle-class product, it will have to do better. I’ve spent the night there recently and the room could have been charitably called “spartan.” I’ve stayed in nicer rooms in Primm, for Pete’s sake. There are a couple of fine amenities on-property, particularly the cocktail lounge but, overall, for the bargain-hunter this is no bargain. The Linq smacks of a job done on the quick and I couldn’t in good conscience recommend it to anyone.

* Although it is no longer a Caesars-owned property, Horseshoe Cleveland set a benchmark for the company by recycling 90% of its waste, the most of any casino in Gary Loveman‘s empire. So three cheers for that. Hard to believe, but it’s already three years that Horseshoe Cleveland has been up and running, and here’s a tally of some of its other achievements in its nascent years.

* Slot routes in Illinois aren’t just a problem for Illinois casinos. A new Rubin Brown study faults them for two consecutive years of declining revenue at Missouri casinos as well.

* Racinos acquired in its takeover of MTR Gaming are proving to be a drag on Eldorado Resorts‘ balance sheets. Presque Isle Downs and Mountaineer Casino, Racetrack & Resort were blamed for a 3% decline in first-quarter revenues, although CEO Gary Carano said the company was making “good progress.” (Is there any other kind?) Although Presque Isle recently petitioned Pennsylvania to be allowed to reduce its slot inventory, Eldorado isn’t giving up on the place, promising $5 million in upgrades. As for one of its star performers, Scioto Downs, it will be the beneficiary of a $6 million, new microbrewery. Eldorado execs projected an improved second quarter, citing cost efficiencies as the spur.