Caesars World

Edit links
Source: Wikipedia, the free encyclopedia.

Caesars World
FormerlyLum's Inc. (1956–1971)
IndustryGaming
Founded1956; 68 years ago (1956)
FounderClifford S. Perlman
Defunct1999; 25 years ago (1999)
FateAcquired by Park Place Entertainment
Headquarters
Paradise, Nevada
,
U.S.

Caesars World Inc. was a hotel and casino operator. It began as Lum's Inc., owner of the Lum's chain of restaurants. It shifted into the gaming business with the purchase of Caesars Palace on the Las Vegas Strip in 1969, selling off the restaurants and changing its name. Caesars grew to eight casinos and resorts over the years, until going through a series of ownership changes beginning in 1995 and was ultimately absorbed by Park Place Entertainment in 1999.

History

Fort Lauderdale, Florida
in 1966

In 1956, brothers Stuart and

Miami Beach named Lums. They expanded to more locations, and took the company public in 1961. In partnership with Ken Chivers, they began offering franchises in 1965, growing from 15 restaurants to 90 within a few months.[1]

In the late 1960s, Lum's went on a buying spree, acquiring a

Kentucky Fried Chicken, for $4 million,[3] and changed its name to Caesars World.[4]

In 1971, the company made a foray into the technology sector, buying 21 percent of Centronics, a maker of printers and gaming control systems, from co-founder Samuel Lang for $1.7 million.[5] Caesars sold part of its stake to Brother Industries in 1974 for $3 million,[6] and then sold its remaining shares in a public offering for $3.5 million.[7]

In 1972, Caesars World bought the

Del Webb Corporation for $13.6 million.[8] A $150-million, 2,000-room resort called the Mark Anthony was planned for the site, but Caesars was unable to find financing,[9] and sold the property four years later for $9 million to a group led by banker E. Parry Thomas.[10]

The company moved its headquarters from Miami in 1973 to be closer to Caesars Palace, but chose Century City in Los Angeles over Las Vegas, because of its proximity to financial centers.[11]

Caesars extended its presence in the Poconos, buying the Paradise Stream Resort in 1973, the Pocono Palace in 1976,[12] and Brookdale-on-the-Lake in 1983, which it renamed as Caesars Brookdale.[13]

The firm returned to the computer industry in 1976, buying 80 percent of Ontel Corporation (Woodbury, NY), a maker of

convertible note.[16]

Caesars expanded to northern Nevada in 1979, taking over operations of the

Park Tahoe casino in Stateline, on the south shore of Lake Tahoe, under a lease agreement with Park Cattle Corp.[17] Caesars agreed to spend $40 million to complete construction of the hotel portion of the year-old property,[18] which was renamed as Caesars Tahoe Palace,[19]
and later simply Caesars Tahoe.

Atlantic City and ouster of the Perlmans

In the early 1970s, the company had entered into a series of deals with Miami lawyer

Teamsters pension fund.[1] The association with Malnik earned Caesars three warnings from the Nevada Gaming Commission,[1] and would continue to haunt the brothers.[20]

After the 1976 legalization of gambling in

Caesars Boardwalk Regency, the city's second casino, opened in 1979,[21] under a temporary license.[22] When the New Jersey Casino Control Commission (NJCCC) completed its full review of the Perlmans' applications, however, their permanent gaming licenses were denied, due to their dealings with Malnik and Cohen.[23] The brothers were forced to take a leave of absence, or face a shutdown of the casino.[23] They negotiated to sell their interest in the company to television producers Norman Lear and Bud Yorkin, but quit the talks without reaching a deal.[20] Analysts speculated that the company might sell the Atlantic City property,[24] but ultimately, Caesars World itself agreed to buy out the Perlmans' 18 percent stake for $98 million in 1980.[25] Clifford remained as chairman of the Las Vegas property until 1982, when he accepted the NJCCC's demand that he step down there as well.[26]

Shortly after Clifford's departure from Caesars Palace, he and Stuart agreed to buy the Dunes hotel, across the street. Due to a non-compete clause in their buyout, Caesars was granted a four-week window to negotiate their own purchase of the Dunes, which they considered as an opportunity to reach the "tour and travel" segment of visitors, in contrast with Caesars Palace's more affluent customer base.[27] Caesars ultimately decided not to pursue the purchase.[28]

After the Perlmans

Financier Martin Sosnoff, who had accumulated a 13 percent stake in Caesars World, made an effort to take over the company in 1987, initially offering $734 million for the remaining shares, or $28 a share.

stock repurchase program.[33] Sosnoff did not participate in the buy-back, but sold two-thirds of his shares a month later, after the Black Monday crash.[34]

Rumbles of another takeover attempt came in December 1988, when

Taj Mahal casino.[35] Caesars adopted a poison pill plan to deter any hostile takeover.[37] Trump dropped his plan and sold off his shares a few months later at a profit of $3.3 million, due to his concerns about heavy competition in the Las Vegas market.[35]

Caesars agreed in 1989 to operate an onboard casino, Caesars Palace at Sea, on the

Crystal Harmony, the first ship launched by Crystal Cruises.[38] Another casino on the Crystal Symphony followed in 1995. Caesars received "minute" earnings from the casinos, but considered them good marketing.[39]

In 1992, Caesars World won out over a dozen other companies to develop and operate a casino with the Agua Caliente tribe in downtown Palm Springs, California.[40] The $25 million, 80,000 square foot casino would have been built across the street from the tribe's Spa Hotel.[41] After being delayed by lawsuits and Governor Pete Wilson's opposition to Las Vegas-style gaming, the partnership was ended amicably in 1995.[42] The Agua Caliente went on to open a smaller casino within the Spa Hotel that year.[43]

Caesars also made a try at the Louisiana market after the state in 1992 authorized its first land-based casino to be opened at the site of the Rivergate Convention Center in New Orleans. The firm was one of ten bidders for the site's lease,[44] but quickly dropped its bid and instead signed a casino management agreement with the front-runner, resort developer Christopher Hemmeter, who proposed to build the biggest casino in the world, the $1 billion Grand Palais. Hemmeter won the city's lease selection process, but due to tension between the state and city governments, the process for awarding the one and only gaming license was separate, and the state casino board awarded it to a partnership between Harrah's Entertainment and Jazzville, a group of politically well-connected local investors.[45] Under pressure from Governor Edwin Edwards, Hemmeter joined forces with Harrah's and Jazzville, and Caesars World was sidelined from the project, which ultimately opened as Harrah's New Orleans. Caesars sued Hemmeter and reached a $5 million settlement.[46]

Caesars partnered with

Casino Windsor opened in 1998.[48]

Caesars Palace in 2006

Acquisition and aftermath

ITT Corporation, a conglomerate whose other assets included Sheraton Hotels and Resorts and the Desert Inn, bought Caesars World in 1995 for $1.7 billion,[49] and was then acquired in 1998 by Starwood.[50]

Starwood head Barry Sternlicht opted to sell off ITT's gaming businesses, preferring the stable cash flow of upscale hotels to volatile casino winnings.[51] Interested parties included Mirage Resorts, Sun International, and Park Place Entertainment, the newly spun-off gaming unit of Hilton. Park Place ultimately won, buying Caesars for $3 billion,[52] though it did not buy the Desert Inn due to its weak location and lack of foot traffic.[51] Starwood also retained the Poconos resorts, with a 10-year license to continue using the Caesars brand.[53]

The Caesars corporate name lived on, as Park Place changed its name to Caesars Entertainment in 2004,[54] and was bought in 2005 by Harrah's Entertainment,[55] which changed its own name to Caesars Entertainment five years later.[56]

Properties at time of acquisition

See also

References

  1. ^ a b c d e Karasik, Ellen (April 28, 1979). "Getting a N.J. gambling license is not easy". Montreal Gazette. Philadelphia Inquirer. Retrieved April 21, 2012.
  2. ^ Gersten, Alan (September 30, 1971). "New Lum's operators laying foundation". Miami News. Retrieved April 21, 2012.
  3. ^ Rau, Herb (November 16, 1971). "Look for Lums to change hands". Miami News. Retrieved April 21, 2012.
  4. ^ Jones, Chris (July 21, 2004). "Caesars Earns Niche in Gaming Pantheon". Casino City Times. Gaming Wire. Retrieved April 21, 2012.
  5. ProQuest 133696453
    . (subscription required)
  6. ProQuest 133845114
    . (subscription required)
  7. ProQuest 133875002
    . (subscription required)
  8. ^ "Caesars World closes hotel deal". Miami News. November 1, 1972. Retrieved April 22, 2012.
  9. ^ "Las Vegas hotel plan canceled". Press-Courier. Oxnard. AP. June 12, 1975. Retrieved April 21, 2012.
  10. ProQuest 133987703
    . (subscription required)
  11. ^ "Miami firm will move to Calif". Ocala Star-Banner. AP. January 14, 1973. Retrieved May 3, 2012.
  12. ^ Iams, David (May 8, 1983). "Pocono resorts, lawmakers play with the idea of legal gambling". Philadelphia Inquirer. via NewsBank. Retrieved May 23, 2012. (subscription required)
  13. ^ "4th resort purchased by Caesars". Reading Eagle. UPI. March 13, 1983. Retrieved April 24, 2012.
  14. ProQuest 134096116
    . (subscription required)
  15. ProQuest 134379522
    . (subscription required)
  16. ProQuest 134861437
    . (subscription required)
  17. ^ "Takeover of resort in offing". Spokane Daily Chronicle. AP. August 29, 1979. Retrieved April 23, 2012.
  18. ProQuest 134353780
    . (subscription required)
  19. ProQuest 371722794
    . (subscription required)
  20. ^ a b "Perlmans balk sale of Caesars World". Reading Eagle. AP. January 7, 1981. Retrieved April 23, 2012.
  21. ^ "Second casino opened". Evening News. Newburgh, New York. AP. June 28, 1979. Retrieved April 23, 2012.
  22. ^ Lyall, Sarah (January 6, 1988). "Stuart Perlman, 60, Co-Founder Of Caesars World With Brother". New York Times. Retrieved April 23, 2012.
  23. ^ a b "Perlmans step aside, Caesars gets OK in N.J." Miami News. AP. October 27, 1980. Retrieved April 23, 2012.
  24. ^ Hollie, Pamela (March 27, 1981). "Analysts see a shift at Caesars". New York Times. Retrieved April 23, 2012.
  25. ^ "Caesars World to buy founding firm". Ocala Star-Banner. AP. December 30, 1981. Retrieved April 23, 2012.
  26. ^ "The Region". New York Times. August 4, 1982. Retrieved April 23, 2012.
  27. ProQuest 134700523
    . (subscription required)
  28. ^ "Caesars Drops Bid For Dunes Hotel". New York Times. January 8, 1983. Retrieved April 26, 2012.
  29. ^ Gillott, Roger (April 7, 1987). "Sosnoff studies new plan by Caesars World". Schenectady Gazette. AP. Retrieved April 29, 2012.
  30. ^ a b Cowan, Alison (June 3, 1987). "Sosnoff raises bid for Caesars World". New York Times. Retrieved April 29, 2012.
  31. ^ Cowan, Alison (June 16, 1987). "Sosnoff gives up bid for Caesars World". New York Times. Retrieved April 29, 2012.
  32. ^ Cowan, Alison (August 14, 1987). "Ruling on Caesars startles Wall St". New York Times. Retrieved April 29, 2012.
  33. ProQuest 398054133
    . (subscription required)
  34. ProQuest 135267958
    . (subscription required)
  35. ^
    ProQuest 135396156
    . (subscription required)
  36. ProQuest 398157115
    . (subscription required)
  37. ProQuest 398176408
    . (subscription required)
  38. ProQuest 398213610
    . (subscription required)
  39. ^ Berns, Dave (March 17, 1997). "Cruise ships lure gaming clients". Las Vegas Review-Journal. Retrieved May 3, 2012.
  40. ^ "Tribe to build Caesars casino". Star-News. Wilmington, NC. November 19, 1992. Retrieved April 28, 2012.
  41. ^ Gorman, Tom (November 16, 1993). "Caesars Plans $25-Million Palm Springs Indian Casino". Los Angeles Times. Retrieved April 28, 2012.
  42. ^ Gorman, Tom (April 5, 1995). "Caesars, Tribe End Pact to Build Casino in Palm Springs". Los Angeles Times. Retrieved April 28, 2012.
  43. ^ Lieberman, Paul (June 19, 1995). "Tribe Tosses the Dice With Its Own Casino". Los Angeles Times. Retrieved April 28, 2012.
  44. ^ Marcus, Frances (June 12, 1992). "Louisiana Legislature Approves Casino Gambling". New York Times. Retrieved April 28, 2012.
  45. ^ Elkind, Peter (December 8, 1997). "The Big Easy's bad bet". Fortune. Retrieved April 28, 2012.
  46. ^ Hiltzik, Michael (December 2, 1996). "A 'Sure Thing' Gone Awry". Los Angeles Times. Retrieved April 28, 2012.
  47. ^ "Company news: Caesars, Circus Circus, and Hilton in casino deal". New York Times. December 4, 1993. Retrieved April 26, 2012.
  48. ^ Ankeny, Robert (July 20, 1998). "Windsor ups casino ante". Crain's Detroit Business.[dead link] (subscription required)
  49. ^ "Company news; ITT attracts 94% of Caesars World's shares". New York Times. January 26, 1995. Retrieved April 25, 2012.
  50. ^ Berns, Dave (February 24, 1998). "Starwood purchase of ITT is official". Las Vegas Review-Journal. Retrieved April 25, 2012.
  51. ^ a b Berns, Dave (April 22, 1999). "Wynn pursues Caesars". Las Vegas Review-Journal. Retrieved May 1, 2012.
  52. ^ Berns, Dave (February 2, 2000). "Park Place considers adding new tower to Caesars Palace". Las Vegas Review-Journal. Retrieved April 25, 2012.
  53. ^ Brelje, Beth (January 8, 2010). "Caesars' three resorts in Poconos switch branding to Starwood". Pocono Record. Retrieved June 17, 2015.
  54. ^ Smith, Rod (January 7, 2004). "Business: Park Place hails change to Caesars". Las Vegas Review-Journal.
  55. ^ Stutz, Howard (June 14, 2005). "Gaming goliath springs to life". Las Vegas Review-Journal. Retrieved May 1, 2012.
  56. ^ "Harrah's changes corporate name to Caesars". St. Louis Business Journal. November 23, 2010. Retrieved May 1, 2012.
Retrieved from "https://en.wikipedia.org/w/index.php?title=Caesars_World&oldid=1218997407"