Casino Business in General--Is it finally at saturation point?

[MJGolf]

Norm, I agree with you in part. But Ceasars is BLEEDING cash. Operating at a loss. A REIT by it's own definition has to disburse 90% I believe in operating capital/income to it's holders. So how do you disburse a negative? Unless it's restructured and I do agree by bankruptcy reorganization how in the world would a REIT be possible of it's current assets? You have to do something with the debt or change it's nature. And two major creditors have fallen out from the alleged agreement. Maybe post bk but not pre? Is that possible?

[metronome]

Norm, without veering into politics, difficult at best, would you agree/not agree that Federal Reserve monetary policy has punished savers, forced savers into more speculative investments to gain a return on their money, rewarded "to big to fail" and that the abolition of Glass-Steagall was probably a unwise course of action. Bankruptcy never happened with most "banks". Forced marriages like Washington Mutual and Chase yes. Holders of the "old" GM stock took a bath while the corp. was recapitalized by the taxpayers, yes?
I agree that currency of some form must exist, even if it be barter, but there is a limit to a "money supply" vis-a-vis it's underlying value, yes?
This thread is going to have a very short shelf-life

[Norm]

Norm, without veering into politics, difficult at best, would you agree/not agree that Federal Reserve monetary policy has punished savers, forced savers into more speculative investments to gain a return on their money, rewarded "to big to fail" and that the abolition of Glass-Steagall was probably a unwise course of action. Bankruptcy never happened with most "banks". Forced marriages like Washington Mutual and Chase yes. Holders of the "old" GM stock took a bath while the corp. was recapitalized by the taxpayers, yes?
I agree that currency of some form must exist, even if it be barter, but there is a limit to a "money supply" vis-a-vis it's underlying value, yes?
This thread is going to have a very short shelf-life

Some of that I agree with and some I don't. But, I don't want to get into politics.

[Norm]

Norm, I agree with you in part. But Ceasars is BLEEDING cash. Operating at a loss. A REIT by it's own definition has to disburse 90% I believe in operating capital/income to it's holders. So how do you disburse a negative? Unless it's restructured and I do agree by bankruptcy reorganization how in the world would a REIT be possible of it's current assets? You have to do something with the debt or change it's nature. And two major creditors have fallen out from the alleged agreement. Maybe post bk but not pre? Is that possible?

I don't know the details. I assume they are spinning off only part into a REIT and using it to obtain cash.

[metronome]

Some of that I agree with and some I don't. But, I don't want to get into politics.

Fair enough

[Bodarc]

You can be certain the State will do everything in its power to protect its tax base. Management will do everything in its power to protect itself and the investors will do everything possible to protect their investment. With all of the hiding and reshuffling of assets going on right now amid a declining source of revenue which none of them can stop, it will be interesting to see how this plays out.

[Aslan]

You can be certain the State will do everything in its power to protect its tax base. Management will do everything in its power to protect itself and the investors will do everything possible to protect their investment. With all of the hiding and reshuffling of assets going on right now amid a declining source of revenue which none of them can stop, it will be interesting to see how this plays out.

I believe they have a real chance at a successful restructuring. They have profitable assets. I have never seen less than a crowd at the Harrah's in AC, even through the downturn after 2008. I don't know how their Vegas properties fare, but they seem busy whenever I've had occasion to visit them, which admittedly is not that often. I think unloading their unprofitable properties and focusing on their profitable ones, keeping them updated and appealing, will do the trick. Except among AP's they seem to have a good reputation with the public at large. Their newest property in Baltimore seems to be going great guns, but I have not been there myself. I would have though MGM would have been the first to go, but apparently their profitable ventures, most notably, Macau, have kept them going.

[Three]

From what I have heard of AC lately the CET management will make changes that will ensure their failure. All through the rise of casinos in neighboring states they made their games worse which made the decision of the people that had easier access to the new casinos easy. They would try the newer options rather than play crappy games. Once a new option becomes habit the old option is but a memory. There were some tat didn't stop going to AC because they weren't BJ players and didn't go to casinos with BJ players. But it seems that AC is shooting themselves in the foot again. Tighter slots worse, rules on carney games etc. They are determined to make sure nobody visits AC unless they are a local. The casinos will close like dominoes falling one after another after another until every domino has fallen and no casinos are left. I don't see any trying to keep their current customer base. And the task of getting people to come back once they have found better options closer to home is almost impossible. Every business owner knows that. Even the gaming commission seems determined to speed this to happening by allowing casinos to do what they couldn't in prior years. They are all chasing extra pennies out of all patrons but will lose their best patrons in the process. All that will be left is the local degenerates and that won't keep a single casino afloat. But the Delaware, Pa, Conn, MD and NY will have record revenues.

They all make the classic bean counter business blunder. When revenues fall you don't try to squeeze more out of your bread and butter customers because that will make them former customers. You try to develop new markets and make investments that assure you won't lose any of the now much more valuable customers that you have always had. It is so much easier to keep your current customers happy than try to replace them after you unsuccessfully tried to get a little extra out of them. The company that hires my services made the same blunder. They tried to save a few hundred dollars. I told them we would lose our best client. Well they got their $300 and have lost $250,000 in profits from that customer every year since. We lost other customers and almost went bankrupt but hey the bean counter saved us maybe $1000 in those 4 years. I hope the millions we lost was worth it. They did it again this year. Over maybe $600 we got from a customer we haven't done business with them again since. The argument was we really need that $600. My pleas that it will cost us hundreds of thousands fell on deaf ears. Well in a few months it has cost us $30K and it will add up every month since. The rub is most new customers are brought to us by referred to us by our long time customers so every time we lose one we lose lots of future customers.

The casinos are killing their future business in the same way but these customers will be happy additions to the competition for AC casinos in other states.

[MJGolf]

If we want to stay on the Ceasar's thread or Harrahs, I think they have just changed their marketing/comping strategy over the years. UNLESS you play slots, you do NOT get the comps. They are freakin' horrible at blackjack but my buddy who loves slots and is extremely lucky, gets comps out the kazoo from them. As to killing the golden goose, what's funny is they wouldn't have him playing if I didn't bring him out there or to them. He didn't even want to sign up but I explained the EV from slot benefits if he was going to play them anyways. And he is a believer now.

I just wish they would go back to the good ol' days on comps for BJ. They seem SO tough on that. I know that AP should get me my own comps but if you play this game as an avocation or a way to make some secondary money, then comps can sure increase enjoyment. But man, they do NOT give you a good rating for just playing BJ..........LOL

[Aslan]

If we want to stay on the Ceasar's thread or Harrahs, I think they have just changed their marketing/comping strategy over the years. UNLESS you play slots, you do NOT get the comps. They are freakin' horrible at blackjack but my buddy who loves slots and is extremely lucky, gets comps out the kazoo from them. As to killing the golden goose, what's funny is they wouldn't have him playing if I didn't bring him out there or to them. He didn't even want to sign up but I explained the EV from slot benefits if he was going to play them anyways. And he is a believer now.

I just wish they would go back to the good ol' days on comps for BJ. They seem SO tough on that. I know that AP should get me my own comps but if you play this game as an avocation or a way to make some secondary money, then comps can sure increase enjoyment. But man, they do NOT give you a good rating for just playing BJ..........LOL

What do they give for VP? Half? That's one way to acquire comps and rooms at Harrahs at not too much long term risk. If you want it at BJ, that means you don't mind playing rated.

[MJGolf]

Yep; I took the advice of a learned man from this site to add VP to my repertoire. That would help with comps and another AP game at my level. I am trying to learn that game, too, though I rely a lot upon Wizard's strategy pages while I'm playing. I access from smartphone. So far, no one has asked me NOT to use the device and another thread said to just print out the strategy pages so I can use them while playing. It's funny; at BJ tables, they always remind you NOT to use smartphone for texting or calling AT the table but no one really says anything at VP machines.

[Aslan]

. It's funny; at BJ tables, they always remind you NOT to use smartphone for texting or calling AT the table but no one really says anything at VP machines.

It has to do with other cheating devices and certain communications that could help the player cheat the house. Cheating devices can be disguised as, or utilize, smartphones. Look at it from the house's perspective.

[MJGolf]

Norm, this explains more why I don't think it works:

http://finance.yahoo.com/news/reit-s...161134807.html

Basically, the author states that you still are going to have to have a serviceable operator (solvent) in order to make it work. Since Ceasars has LOST money ever since they were merged, hard to say that a splitting the operator out as one part of the REIT would work. They themselves say they can NOT last through 2015 without some sort of restructuring, Chap. 11, etc.

And then, just today, the bondholders issued a default notice. This is NOT a minor issue. No matter WHAT Ceasars says as to it's merits. And I guess they are letting go of approximately 1% of their work force. I do NOT see why anyone thinks their stock would be any sort of investment that will make money UNLESS you are shorting or betting for it to decrease in value.

http://finance.yahoo.com/news/caesar...154931859.html