Caesars chairman calls for legal online poker

11 May 2011

LAS VEGAS, Nevada -- Caesars Entertainment Corp. Chairman Gary Loveman used his company's quarterly earnings conference call Tuesday to rally support for the federal legalization of Internet poker.

Loveman and Caesars have long been the casino industry's leading advocates for expansion into online gambling. He has stepped up his efforts after last month's federal indictments of executives at three online poker companies and the shutdown of three major online poker websites.

Caesars, which owns the World Series of Poker, believes the timing is right for online gaming to be legalized and regulated at the federal level.

"In an industry where breakthroughs and our ability to serve new customers come episodically, the movement of our brands online represents the next great phase of development for Caesars," Loveman told analysts Tuesday.

The indictments ended Americans' access to PokerStars, Full Tilt Poker and Absolute Poker, but other offshore Internet poker operators stepped into the void. Loveman said American dollars and jobs, which could stay in the U.S. and Nevada where Caesars is based, are being lost to foreign operations.

"Much like we observed in Prohibition, attempts to ban Americans from playing poker online have clearly failed," Loveman said. "It's time for Congress to legalize online poker."

Caesars narrowed its first-quarter loss, saying Las Vegas business is showing signs of improvement.

The privately owned casino operator, which has publicly traded debt, said its net loss in the quarter ended March 31 was $147.5 million, which compared with a net loss of $195.6 million in the same quarter a year ago.

Caesars, which has more than 50 casinos worldwide including 10 on the Strip, said its overall revenues fell 1 percent to $2.18 billion in the quarter.

The current quarter included a gain of $21 million related to the early payoff of debt. The same quarter last year included a loss of $30.2 million tied to the early payoff of debt. Caesars also reduced marketing costs during the quarter.

"Caesars reported results largely in line with our expectations," Deutsche Bank gaming analyst Andrew Zarnett said.

In a statement, Caesars said reduced visitation by rated players and the temporary closures of four casinos in the Illinois and Indiana markets because of weather and flooding caused revenues to decline.

However, the period also included a full quarter of operations from Planet Hollywood Resort, which offset some of the lost business.

Overall revenues in Las Vegas grew 6.4 percent to $726.4 million. The company said hotel revenues increased 17.4 percent, average daily room rates increased 7.6 percent and occupancy percentage rose 4.4 percentage points. Cash flow in Las Vegas rose 12.3 percent.

"Hotel occupancy and better room rates helped to boost results," KDP Investment Advisors gaming analyst Barbara Cappaert said in a research note. "Results were essentially in line and reflect our outlook for a slow recovery in Las Vegas offset by challenges in Atlantic City."

Caesars operates four of the 11 hotel-casinos in Atlantic City, where the company said revenues fell almost 2 percent in the quarter. Loveman said moves by New Jersey to market Atlantic City would help the gambling destination improve results.

"Changes to the regulatory structure and process in Atlantic City during the first quarter will enable us to operate more efficiently there," Loveman said.

The company plans to continue its focus on Las Vegas. Loveman said strengthening market fundamentals led to the company's decision to complete the 662-room Octavius tower at Caesars Palace and begin work on Linq, a retail, dining and entertainment project on the east side of the Strip across from Caesars Palace.

Financing associated with the projects was completed subsequent to the end of the quarter.

"We expect the Linq and Octavius projects to increase visitation to our properties on the Las Vegas Strip," Loveman said.

Related Links
Deutsche Bank Securities Inc. Gaming Vendor Information
PokerStars Europe Site Details
Full Tilt Site Details
Caesars Entertainment Ownership Details
CIE Ownership Details
Caesars Palace Details
Nevada Gambling
Ranked Online Poker Rooms


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