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Promus Companies

From Alfawiki
Harrah's Entertainment
Company typePublic
Nasdaq: CZR
Founded1990; 36 years ago (1990)
Reno, Nevada, U.S.
DefunctTemplate:End date and age
FateAcquired by Eldorado Resorts
HeadquartersParadise, Nevada, U.S.

Harrah's Entertainment—which later operated as Caesars Entertainment Corporation and was formerly known as The Promus Companies—was a United States-based operator of casinos and hotels. Originating in Reno, Nevada and headquartered in Paradise, Nevada, the firm oversaw more than 50 resorts and seven golf courses under several brand names. By 2013, it ranked as the fourth-largest gambling enterprise globally, with annual revenues reaching $8.6 billion. In 2020, it was acquired by Eldorado Resorts, which then adopted the Caesars Entertainment brand.

At the time of its acquisition, Caesars was a publicly traded entity but predominantly controlled by private equity groups such as Apollo Global Management, TPG Capital, Paulson & Co., alongside investor Carl Icahn. Its principal operating division filed for Chapter 11 bankruptcy protection in 2015,[1] which resulted in the establishment of Vici Properties.

William F. Harrah period (1937–1978)

The company’s roots trace back to October 29, 1937, when Bill Harrah inaugurated a modest bingo hall in Reno, Nevada, laying the groundwork for what would become Harrah's Reno.[2][3] Expansion followed in 1955 with a move to Stateline, Nevada on Lake Tahoe’s southern shore, culminating in the launch of Harrah's Lake Tahoe.[4]

Harrah's Inc. transitioned to a public company via its initial public offering in 1971.[5] The company secured a listing on the American Stock Exchange in 1972 and became the first casino enterprise to be listed on the New York Stock Exchange in 1973.

Bill Harrah passed away in 1978 at age 66 during surgery intended to repair an aortic aneurysm at the Mayo Clinic.[6]

Acquisition by Holiday Inn

In February 1980, Holiday Inn purchased Harrah's, Inc. for $300 million. The sale was reportedly offset by liquidating Harrah's extensive collection of nearly 7,000 vintage automobiles. At that time, Holiday Inn held stakes in two casino ventures: the under-construction Holiday Inn Marina Casino located in Atlantic City, and a 40 percent ownership interest in the Holiday Casino adjacent to its Las Vegas Strip hotel.

Subsequently, July 1987 saw the opening of Bill's Casino Lake Tahoe, followed by the debut of Harrah's Laughlin in August 1988.

The Promus Companies

The organization that evolved into Harrah's Entertainment originated in 1990 under the name The Promus Companies. Established to manage the divestiture of Holiday Inn's hotel division to Bass PLC, Promus retained ownership of Harrah's, Embassy Suites, Homewood Suites, and Hampton Inn, while Bass kept only the Holiday Inn assets. In 1991, Promus shifted its corporate headquarters from Reno to Memphis, Tennessee.

In April 1992, the Holiday Casino underwent rebranding and became known as Harrah's Las Vegas.

The late 1980s and early 1990s witnessed a surge in gambling market expansion, fueled by the growth of Indian gaming and the legalization of riverboat casinos. During 1993 and 1994, the company inaugurated several new venues including Harrah's Joliet, Harrah's Vicksburg, Harrah's Tunica, Harrah's Black Hawk, Harrah's Central City, Harrah's Shreveport, Harrah's North Kansas City, and Harrah's Ak-Chin.

Renamed as Harrah's Entertainment

To mitigate investor undervaluation linked to its gaming operations, Promus separated its non-gaming hotel businesses in 1995. This led to the formation of Promus Hotel Corp., which took control of Embassy Suites, Hampton Inn, and Homewood Suites. Meanwhile, the parent company overseeing 16 casinos adopted the new name Harrah's Entertainment.

Throughout the next decade, Harrah's pursued an aggressive expansion strategy, launching properties such as Harrah's Skagit Valley, SkyCity Auckland, Harrah's St. Louis-Riverport, Harrah's Cherokee, Harrah's Prairie Band, Harrah's New Orleans, and Harrah's Rincon. The company also bolstered its portfolio by acquiring significant assets including Southern Belle Casino, Showboat, Inc., Rio All Suite Hotel and Casino, Players International, Harveys Casino Resorts, Louisiana Downs, Horseshoe Gaming Holding Corporation, and the World Series of Poker.

On September 4, 1997, Harrah's introduced its Total Gold loyalty program—later renamed Total Rewards in 2000 and Caesars Rewards in 2019—developed with a $20 million investment. This was the industry's first comprehensive comps program allowing points earned at any casino within the network to be redeemed across all properties, becoming a central factor in driving growth.

Gary Loveman, a Harvard Business School professor, joined as chief operating officer in 1998 and served as CEO from 2003 until 2015. His leadership focused on leveraging data-driven customer insights and enhancing operational efficiencies.

In 1999, Harrah's moved its headquarters from Memphis to Las Vegas to better align with its primary gaming market.

Purchase of Caesars Entertainment, Inc.

In 2005, Harrah's executed its largest acquisition by purchasing Caesars Entertainment, Inc. for $10.4 billion—a move prompted by competitive pressures following the MGM Mirage and Mandalay Resort Group merger announcement. To comply with antitrust regulations, both companies divested several properties such as Harrah's East Chicago and Harrah's Mardi Gras. This acquisition expanded Harrah’s portfolio to include 40 casinos plus four cruise ship casinos while significantly strengthening its presence on the Las Vegas Strip through Caesars’ four casinos and enhancing appeal to high-stakes gamblers.

Harrah’s sought international expansion through joint ventures announced in Spain, Slovenia, and the Bahamas as well as pursuing a resort license in Singapore in 2005; however, these initiatives did not come to fruition. The company acquired London Clubs International in 2006 and purchased the Macau Orient Golf club in 2007—strategic moves targeting key global gaming markets.

Between 2005 and 2010, Harrah’s solidified control over the east side of the Las Vegas Strip by acquiring casinos such as Bourbon Street, Imperial Palace, Barbary Coast, and Planet Hollywood, along with substantial adjacent land parcels—laying groundwork for future development projects.

Following Hurricane Rita’s impact in 2005 and strategic adjustments in 2006, Harrah’s closed its Lake Charles casino and sold off both the Flamingo Laughlin and Grand Casino Gulfport properties.

Privatization of the Company

Loveman sought advice from private equity magnate David Bonderman regarding the possibility of separating Harrah's Entertainment's real estate into an independent real estate investment trust (REIT), intending to benefit from the typically higher price-to-earnings ratios seen in hotel enterprises compared to gaming businesses. By 2006, the focus had shifted toward a leveraged buyout led by Bonderman's firm, TPG Capital. Meanwhile, Apollo Global Management also expressed interest in acquiring Harrah's, and Loveman proposed a joint effort with TPG. By the end of that year, both parties agreed on a purchase price of $17.1 billion in cash plus $10.7 billion in assumed debt. The transaction was finalized in January 2008, resulting in Harrah's carrying $25.1 billion in liabilities.

The Linq Development

Originally intending to reconstruct resorts entirely, the company altered its strategy following the economic downturn and launched Project LINQ in 2009. This initiative introduced 20 dining and drinking establishments situated between its Imperial Palace, O'Sheas, and Flamingo casinos on the eastern segment of the Las Vegas Strip. The development created an entertainment district reminiscent of those found in Los Angeles and New Orleans, providing an alternative to the Fremont Street Experience by offering a more expansive and varied recreational setting beyond just casino areas.

Las Vegas Arena Plans

In 2007, Harrah's joined forces with Anschutz Entertainment Group (AEG) to construct a 20,000-seat arena located behind Bally's and Paris casino-hotels. Earlier proposals for a baseball stadium were abandoned after Harrah's acquired Park Place Entertainment. However, disagreements over cost-sharing with AEG and the lack of a major sports tenant during the 2008 financial crisis caused delays. Although groundbreaking was initially scheduled for June 2008, by 2009 no traffic impact study had been conducted despite the arena’s prime location.

By 2010, plans shifted to situate the arena behind the Imperial Palace but faced opposition from the Clark County Commission regarding public funding through special tax districts. AEG exited the project by 2012 after MGM Resorts International introduced the publicly unfunded T-Mobile Arena near New York-New York and Park MGM resorts, gaining AEG’s endorsement.

Following its acquisition of Planet Hollywood, Harrah's secured contiguous properties along the Strip, including undeveloped parcels earmarked for a professional basketball or hockey venue. Together, these three casinos provide over 8,000 rooms with potential direct access to an arena.

In August 2010, Harrah's revealed plans to manage casinos in Cincinnati and Cleveland, Ohio, set to open in 2012.

Rebranding as Caesars Entertainment Corporation

Although an IPO was called off on November 23, 2010, the company officially rebranded from Harrah's Entertainment to Caesars Entertainment Corporation to capitalize on Caesars' worldwide brand recognition. The Harrah's name continued as one of its primary casino brands.

On February 8, 2012, Caesars completed its initial public offering, with common shares beginning trading on NASDAQ under the ticker "CZR."

Merger with Caesars Acquisition Company

On December 22, 2014, Caesars announced its intention to acquire Caesars Acquisition Company. Shareholders of Caesars Acquisition Company received 0.664 shares of Caesars Entertainment common stock for every share they owned.

Casino division initiates Chapter 11 bankruptcy proceedings

On January 15, 2015, Caesars Entertainment Operating Company, Inc., together with approximately 170 affiliated subsidiaries, sought protection under Chapter 11 bankruptcy. The parent entity, Caesars Entertainment Corporation, remained outside of these filings. This move sparked legal disputes between the investors of the casino operating group and the parent company concerning debt guarantee obligations. The resulting financial restructuring facilitated the establishment of Vici Properties.

Subsequently, on November 2, 2015, Rock Gaming declared its intention to take over management responsibilities for Horseshoe Casino Cleveland, Horseshoe Casino Cincinnati, and ThistleDown Racino from Caesars Entertainment. This transfer was finalized by June 2016.

Acquisition and divestiture of Playtika

In May 2011, Caesars completed the purchase of Playtika for an amount between $80 million and $90 million. Playtika, founded in 2010 by Robert Antokol and Uri Shahak, specialized in developing social gaming platforms including slotomania.com and caesarsgames.com. By June 2016, a Chinese investment group featuring Alibaba leader Jack Ma’s Yunfeng Capital agreed to acquire Playtika for $4.4 billion.

On November 29, 2017, Caesars disclosed the sale of Harrah's Las Vegas to Vici Properties, while retaining operational control. Concurrently, Caesars purchased Centaur Gaming for $1.7 billion and initiated construction on the new Las Vegas convention center named Caesars Forum.

Merger between Caesars and Eldorado

In February 2019, Turner Sports collaborated with Caesars to deliver sports betting content through Bleacher Report, including establishing a dedicated studio at Caesars Palace in Las Vegas.

Merger discussions between Caesars and Eldorado Resorts were announced on March 17, 2019. By June 23, Caesars accepted an $8.6 billion bid from Eldorado. At that time, Caesars controlled 53 properties compared to Eldorado’s 26. The merged entity’s board was structured to include five members from Caesars and six from Eldorado.

In May 2019, ESPN entered into an exclusive partnership with Caesars to provide sports odds across its programming and planned a Las Vegas studio at The Linq focused on sports betting content.

On April 16, 2019, Anthony Rodio, CEO of Affinity Gaming, was appointed as CEO of Caesars, succeeding Mark Frissora. Rodio’s appointment followed a recommendation by influential investor Carl Icahn, who held a 28.5% stake and advocated for the company’s sale.

Shareholders approved the merger on November 15, 2019; the transaction was finalized in July 2020.

Penalties and regulatory resolutions

In 2015, the US Treasury’s Financial Crimes Enforcement Network (FinCEN) imposed an $8 million fine on Caesars Entertainment’s Las Vegas casino for insufficient transaction monitoring controls. An IRS review conducted in 2012 had uncovered over 100 unreported suspicious activities. The Nevada Gaming Control Board issued a related penalty amounting to $1.5 million.

The UK's Gambling Commission reprimanded Caesars in 2015 due to inadequate anti-money laundering procedures at two London-based casinos. As part of the resolution, Caesars committed to strengthening compliance efforts and paid £875,000 designated for "socially responsible purposes."

In 2020, Caesars Entertainment EMEA faced a record £13 million fine from the UK Gambling Commission following failures connected to VIP programs. These included permitting a customer with a gambling addiction to lose £323,000 within one year and neglecting to verify funding sources for high-stakes gamblers, including a politically exposed individual who lost £795,000. Subsequently, three senior executives had their licenses revoked.

Sale

In April 2020, an agreement was reached between Twin River Worldwide Holdings, Caesars Entertainment, and Vici Properties for the acquisition of Bally's Atlantic City located in New Jersey.

Properties

At the time of the 2020 acquisition, Caesars managed the following properties:

Formerly owned properties include:

Further reading

External links

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