Park Place Entertainment

Last updated
Park Place Entertainment
Industry Gaming
Predecessor
Founded1998;26 years ago (1998)
Defunct2005;19 years ago (2005)
FateAcquired by Harrah's Entertainment
Headquarters
Paradise, Nevada
,
U.S.
Key people
Wallace R. Barr, CEO
Harry Hagerty, CFO
William Barron Hilton and Stephen F. Bollenbach, Co-Chairman

Park Place Entertainment, later named Caesars Entertainment, Inc., was a casino company based in Paradise, Nevada. For a time it was the largest casino operator in the world. It was formed in 1998 as a corporate spin-off of the gaming division of Hilton Hotels, and renamed as Caesars Entertainment in 2003. The company was acquired in 2005 by Harrah's Entertainment, which later took on the Caesars Entertainment name. [1]

Contents

History

Caesars Entertainment logo (2003-2005) CaesarsEntertainment2004.JPG
Caesars Entertainment logo (2003–2005)

Hilton's involvement in the gaming industry began in 1947, with its approval to operate what would be the Caribe Hilton Hotel and Casino in Puerto Rico. [2] [3] Other Caribbean casinos followed, including the Havana Hilton [4] and El Panama Hilton. [5] Hilton's international hotels were spun off as a separate company in 1964. [6]

Hilton returned to gaming in 1970, buying a controlling interest in Kirk Kerkorian's International and Flamingo hotels in Las Vegas. [7] Its casino holdings grew to ten properties over the years, [8] accounting for more than half of the company's revenues. [9]

Hilton unsuccessfully tried to sell itself in 1989 and again in 1995. [10] The failures were partly attributed to gaming regulations that would make a purchase by a foreign company difficult, leading the company to consider a spinoff of its gaming operations. [9]

By 1996, new CEO Stephen Bollenbach, a financial expert with experience in the hotels industry and 1990-1992 CFO of The Trump Organization, had set a goal of becoming the biggest company in the gaming industry, discarding the idea of a spinoff. [8] With growth in the number of gaming jurisdictions stalled, Bollenbach aimed to expand through acquisitions, especially in Atlantic City, where Hilton had no presence. [8] Bally Entertainment, with five casinos, including two in Atlantic City, was a natural target. Its midscale clientele, heavy on slots revenue, would provide balance to the volatility of Hilton's high-end baccarat players. [11] Hilton beat out ITT Corporation with an offer of $2 billion in stock plus $1 billion of assumed debt, [8] and the purchase closed in December. [12] Bally CEO Arthur Goldberg joined Hilton as president of gambling operations. [13]

By 1998, Hilton was again trying to split its gaming and hotel operations, believing that its stock price was dragged down by involvement in the highly competitive gaming industry. [14] Efforts were hampered by the need for a merger to provide a business purpose to qualify the spin-off for tax-free status. Negotiations for a spinoff and purchase of Circus Circus Enterprises broke down over disagreements about price and management, and concerns about Hilton's debt level. [15] An agreement was finally reached for Hilton to spin off its casinos as a new public company, Park Place Entertainment, which would immediately buy Grand Casinos, owner of three properties in Mississippi, for $650 million in stock plus $550 million in assumed debt. [16] Grand's operations outside of Mississippi, including three Indian casinos it managed, were spun off as a separate company, Lakes Entertainment, before the merger. Goldberg was installed as CEO of the combined company, which had eighteen casinos. [17]

In 2000, Park Place purchased Caesars World, whose casinos included Caesars Palace and Caesars Atlantic City, from Starwood for $3 billion. The four Caesars Pocono Resorts were excluded from the sale. [18]

In 2001, Park Place was named to the Gaming Hall of Fame.[ citation needed ]

In July 2003, plans were announced to rename Park Place as Caesars Entertainment, capitalizing on the Caesars brand name. [19] The change took effect on January 6, 2004, and the company's ticker symbol was changed to CZR. [20]

On June 18, 2004, Caesars sold the Las Vegas Hilton hotel-casino to Colony Capital for $280 million. A Caesars spokesperson stated that the sale would help the company focus on its major casinos on the Las Vegas Strip. [21]

On July 14, 2004, Harrah's Entertainment agreed to purchase Caesars Entertainment for over $5 billion. The acquisition was completed in 2005. In turn, Harrah's was itself acquired and taken private in 2006 by a group of private equity funds including Apollo Global Management, The Blackstone Group and TPG Capital and later took on the Caesars Entertainment name. [22]

The company sold Caesars Tahoe in June 2005 for $45 million to Columbia Sussex, owner of the nearby Horizon Casino. It was one of a series of sales made by Caesars and Harrah's to avoid anti-trust issues with their proposed merger.

Properties owned when acquired by Harrah's

Former

See also

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References

  1. ↑ Stutz, Howard (2008-04-10). "Harrah's opts to hail name of Caesars". Las Vegas Review-Journal .
  2. ↑ Sanchez, Jesus (9 August 1993). "Betting on casinos: Hilton's hotels take a back seat to gambling in global investment plan". Los Angeles Times.
  3. ↑ O'Reilly, W.F. (23 October 1949). "Licensed casinos: Puerto Rico now permits game rooms in hotels". New York Times. ProQuest   105927467.(subscription required)
  4. ↑ "New Havana hotel guarded by 320 police". Milwaukee Sentinel. AP. 22 March 1958. Retrieved 2012-05-10.
  5. ↑ "Carnival fiesta days near in Panama". Chicago Daily Tribune. 13 November 1960. ProQuest   182696930.(subscription required)
  6. ↑ Moore, Thomas (27 May 1985). "Barron Hilton fights for Hilton Hotels". Fortune. Retrieved 2012-05-10.
  7. ↑ "Nevada gaming agency clears Hilton to control two hotels and casinos". Wall Street Journal. 18 September 1970. ProQuest   133464288.(subscription required)
  8. 1 2 3 4 Chris Kraul; Jesus Sanchez (7 June 1996). "Hilton Hotels to acquire Bally Entertainment". Los Angeles Times. Retrieved 2012-05-10.
  9. 1 2 Yoshihashi, Pauline (11 August 1989). "Hilton begins its search for a buyer, indicates a possible spinoff of casinos". Wall Street Journal. ProQuest   398102987.(subscription required)
  10. ↑ Yoshihashi, Pauline (12 May 1995). "Hilton Hotels plans spinoff of its casinos". Wall Street Journal. ProQuest   398452761.(subscription required)
  11. ↑ Orwall, Bruce (7 June 1996). "Hilton to acquire Bally Entertainment in push to be largest gambling concern". Wall Street Journal. ProQuest   398694119.(subscription required)
  12. ↑ "Hilton completes Bally deal". Wall Street Journal. 19 December 1996. ProQuest   398548351.(subscription required)
  13. ↑ "Hilton casinos' head was paid $1 million". New York Times. 31 March 1998. Retrieved 2012-05-10.
  14. ↑ Pollack, Andrew (30 June 1998). "Hilton Gambling Split-Off Seen, Then Merger With Grand Casinos". The New York Times. Retrieved 2012-05-09.
  15. ↑ Pollack, Andrew (23 March 1998). "Hilton Hotels and Circus Cirucs call off merger talks". New York Times. Retrieved 2012-05-10.
  16. ↑ Steinhauer, Adam (25 November 1998). "Investors OK Hilton, Grand deal". Las Vegas Review-Journal. Retrieved 2012-05-09.
  17. ↑ Palermo, Dave (24 November 1998). "Shareholders Approve Deal to Merge Grand Casinos With Hilton Hotels". Knight Ridder/Tribune Business News. Archived from the original on 26 March 2016. Retrieved 2012-05-09.
  18. ↑ "Park Place Entertainment to Purchase Starwood's Caesars Casino Operations". The Wall Street Journal. 28 April 1999. Retrieved 11 January 2021.
  19. ↑ Smith, Rod (16 July 2003). "Park Place to take Caesars name". Las Vegas Review-Journal. Archived from the original on 29 December 2004.
  20. ↑ Smith, Rod (7 January 2004). "Park Place hails change to Caesars". Las Vegas Review-Journal. Archived from the original on 19 February 2004.
  21. ↑ "Colony Capital buys Las Vegas Hilton". bizjournals. 18 June 2004. Retrieved 11 January 2021.
  22. ↑ Goldman, Adam (15 July 2004). "Harrah's rolls largest casino deal". East Bay Times. Retrieved 11 January 2021.
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