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Caesars pursues $1 billion casino in Philippines

23 October 2014

Caesars Entertainment Corp. is angling to build a $1 billion hotel-casino development in the Philippines in an effort to break into the Asian gaming market.

The Las Vegas-based company operates more than 50 resorts across the U.S., including nine on or near the Strip. However, Caesars missed out on gaming opportunities in Macau and Singapore and has been actively exploring other areas of Asia.

Caesars has been involved in the off-and-on Japan casino legalization process and announced a deal this year to build a casino-resort in South Korea.

The company, which has been taking steps in the past 18 months to address its gaming industry-high $24.2 billion in long term debt, did not make any formal announcement about the Philippines.

Bloomberg News Service and Reuters reported that Caesars Chairman Gary Loveman and Steven Tight, president of the casino owner’s international development unit, held preliminary talks with Philippine President Benigno Aquino last month in the U.S.

Caesars spokesman Gary Thompson confirmed the talks Wednesday in an email.

“Gary Loveman did meet with Aquino and expressed interest in gaming opportunities there, but I don’t know the specifics of their discussion,” Thompson said.

Tight told Bloomberg the Philippines lacks a major international brand.

“There’s a chance to create something that will drive tourism, that will really put Manila on the regional tourism map,” Tight told the news service in Manila.

Caesars approached the government to seek a license and approval for the lease of the land next to Ninoy Aquino International Airport, about three miles from Entertainment City, Tight said. He added that Caesars is working with a local company on the project and is seeking a “large scale” domestic partner.

The Philippines awarded four licenses in 2008 and 2009 to casino operators owned by billionaires — including Australian tycoon James Packer and Macau casino operator Lawrence Ho — to build resorts in Entertainment City, a Las Vegas-style complex designed to compete with Singapore and Macau’s gambling markets.

Each Philippine licensee agreed to invest $1 billion over five years. Entertainment City will have four casinos including Solaire Resort and City of Dreams Manila.

A Philippines gaming regulator told Reuters that Caesars would have to invest at least $1.5 billion into a project.

Caesars has been under fire from creditors over its debt obligations. Second-lien bond holders have filed notices of default against the company.

Caesars announced in the last month it was in talks with first lien bond holders and banks in an effort to restructure to debt, much of which was brought on by its 2008 private equity-led buyout.

Several analysts have speculated Caesars will have to file Chapter 11 bankruptcy to restructure its debt.

Shares of Caesars closed at $11.57 Wednesday on the Nasdaq, down 87 cents or 6.99 percent.