Loveman’s chickens come home to roost; Are casinos blowing off a $12 trillion demographic?

As cheap as it’s been lately, we hope you haven’t bought any Caesars Entertainment stock. Shares dropped 12% and kept falling right after Judge Benjamin Goldgar declined to extend protection of Caesars from creditor litigation any longer, which means that lawsuits Gary_loveman_Cropped_fmtseeking up to $11 billion in compensation can proceed — potentially tipping the whole Caesars kit ‘n kaboodle into bankruptcy. Caesars has no one to blame but Chairman of the Board Gary Loveman, who was not only the moving force behind the ludicrous LBO that started the trouble but also presided over all the jiggery-pokery of moving around Caesars’ assets that inspired comparisons to Enron and provoked creditors’ wrath.

Caesars maintains that ongoing talks with creditors would be imperiled if litigation was taken off “hold.” Judge Goldgar wasn’t buying it, perhaps exasperated by the tortoise-powered pace of Caesars’ dickering. “I can’t find that an injunction is likely to enhance the prospects for negotiation,” he said. Accusing company owners Apollo Management and Texas Pacific Group of having “a comfortable free ride” on his previous injunction, Goldgar was evidently at the end of his patience, perhaps further exasperated by Apollo’s and TPG’s contemptuous refusal to add any funds to the $4 billion settlement that’s on the table. Although Caesars vowed to appeal, University of Chicago Law School academic Douglas Baird said, “It would be hard to reverse Goldgar without dramatically expanding the availability of third-party releases, something that would be out of step with the standards in other circuits.” In other words, Caesars has a tough roe to hoe, whatever happens now.

* Baha Mar, the nightmarish, $3.5 billion casino megaresort in the Bahamas that Caesars Entertainment wisely evacuated, is supposedly cleared for a happy resolution. Bahamian Prime Minister Perry Christie says the project will finally be finished by next spring. Export-Import Bank of China has agreed to complete the project and sell it to a “world-class hotel and casino operator.” Though that sounds easier said than done, Genting Group has been heavily tipped as the inevitable buyer, especially after Christie attended the groundbreaking of Resorts World Las Vegas for no apparent reason. Earlier rumors had MGM Resorts International lined up to purchase Baha Mar but MGM shot that talk down. Given the amount of time that a Baha Mar solution has been supposedly just around the corner, we’ll believe it when the doors actually open.

* Baby Boomer and casino consultant Deana Scott argues that the industry is missing an opportunity by failing to market to women aged 45-60. “It’s a good investment too, because women control 60% of all wealth in the [United States] and make 75% of all household buying decisions,” she writes, adding that Millenials should be a secondary priority as demographics are concerned. If, as Scott’s research indicates, women will control at leat $12 million in wealth, perhaps considerably more, it would behoove the casino industry to sit up and take heed. She offers seven concrete suggestions (including, “I don’t want to smell like an ashtray when I get home. Maybe I would play more if I could actually breathe while playing.”), concluding with the compelling argument that “if this demographic isn’t enamored with what we offer, you most definitely are wasting money enticing millennials with the same tired product.”

* Much to the chagrin of Alabama Gov. Robert Bentley (R), his lottery bill was rescued from a House of Representatives committee and passed by a 64-35 margin … but the changes made in the House were unpalatable to the state Senate and the whole thing just died. It remains to be seen if Bentley will revisit the issue next year.

* Vegas Inc. has ranked the top casino operators in the Las Vegas area and, no surprise, MGM comes out on top (and this is without counting size of workforce). Caesars Entertainment holds the #3 spot, behind Station Casinos — but not for long. When purchases of Cannery Casino Resorts and Aliante Gaming close, later this year, Boyd Gaming will elbow Caesars aside, though it will still be well behind Station in terms of gaming capacity.

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