Horseshoe Southern IN.... rumors are flying...

Per a couple of employees, CET has sold our home casino, HSI. Has anyone heard of this? I certainly hope this is not true....visit weekly and is the reason I have been Diamond for many years. Don't think I could do it with only 2 trips to LV yearly. Guess it would mean we would have to drive 2 hours to Cincy if anything like this happens....

 

They sold their stake in the Horseshoe Cleveland as well however it is remaining under the total rewards program for the time being. Maybe the same will happen with HSI.

 

More casinos are following the hotel industry model where the managing company, i.e. Marriott, Starwood etc., don't own the actual property. As long as another casino company doesn't buy the property most likely it will stay within the Total Rewards system. The Total Reward system has proven to be a valuable asset and marketing tool.

 

HSI gaming license was never held by CET, it was always owned by another party. However CET owned and operated the casino, hotel, venues, and leveraged their player tracking system.
HSI was one of the properties effected by the bankruptcy, so it's very possible these moves are part of the bankruptcy proceedings to turn the place into a real estate investment trust and pay down debt.

Not part of the Chapter 11 plan, I thought that CET was reducing the number of operating properties from 44 to 38.

Rock Gaming owned the operating license and properties in OH, CET just operated for a piece of revenue. So its no surprise these went first to Rock gaming.
Looking over the agenda for IGC business meeting today, I see that on the agenda is a change
of POA / Trustee for HSI and Horseshoe Hammond which are both under the same operating company for CET. So it could be a done deal.

http://www.in.gov/igc/files/03-19-2015-Notice-Agenda.pdf


Researching this some more I found this article from March...

http://www.bizjournals.com/memphis/blog/2015/03/caesars-selling-horseshoe-properties.html

 

Just a follow up, spoke to a friend who was at the poker room last night. He is confirming hearing the same message from a dealer, that the property has indeed been sold along with Horseshoe Hammond.
He could not say specifics, but the rumor is Rock gaming will acquire both properties with CET, continuing to operate thru some form of licensing arrangement.

This coincides with the IGC agenda today with a POA / Change of Trustee request for both properties.

 

I would be very surprised to see Horseshoe Hammond sell. I understand selling HSI. Horseshoe Hammond is CET's number 2 property nationwide in terms of revenue behind Caesars Palace.

 

They sold thier stake in Horseshoe Cincinnati back in Feb. but it's still a total rewards property for now:
http://www.cincinnati.com/story/money/2015/02/26/caesars-sells-horseshoe-casinos-stake/24083397/

 

But operating costs, wagering taxes, admissions taxes, capital expenditures (remodel $500 million), and intense competition may not make them viable to keep in long run.

Hammond government has already complained about declining casino revenues.

http://www.bloomberg.com/news/articles/2014-10-22/fading-casino-revenue-has-indiana-town-selling-debt-muni-credit

 

Something is really f-ed up if they sell Hammond. Even if revenue is down, it makes a massive amount of revenue relative to the rest of the region, meaning not only Indiana but Illinois and Michigan. There is something wrong if they keep selling of their most active properties in the Midwest when so many others are struggling. There no new major threat in terms of competition. Only a Chicago casino could potentially hurt it and that's a pipe dream. Plus Indiana is looking to tweak gaming laws to help their casinos.

Are these casinos really sold or does this have something to do with the attempts to do a REIT?

 

Everything I have heard from 3 sources, says CET is dumping them because they need the cash. Both properties fit in well to Rock Gaming growth strategy and an announcement is coming soon.

 

Who is Rock Gaming and will CET continue to run both casinos & keep in the TR program like Cincinnati?

 

Rock Gaming is a company owned by Dan Gilbert (Cleveland Cavs owner). Rock will likely be the owner and CET will be the operator. This is how Horseshoe Baltimore and Cleveland are set up (I think). Total Rewards will probably still be the same since Caesars will still be the operator.