Caesars Entertainment Corp (NASDAQ:CZR) restructuring drive after one of its largest units exited bankruptcy is gaining momentum. The Pennsylvania Gaming Control Board and the Iowa Racing Gaming Co has granted the company key regulatory approvals. The company has already received similar approvals in Maryland, Mississippi and Illinois as part of the restructuring drive.
Real Estate Focus
In addition to the regulatory approvals, Caesars Entertainment has confirmed the creation of a real estate investment trust that will handle its casinos. The company expects the trust to result in the reduction of debt and other obligations to $14.6 billion from $23.5 billion as of 2014.
The casino giant has already set its eyes on the real estate business as it continues to explore new growth opportunities beyond gambling. Chief Executive officer, Mark Frissorra, has confirmed plans to develop more than 90 acres that the company owns in Less Vegas.
“We have a lot of real estate that’s underutilized,” Frissorra said in an interview with Bloomberg TV Thursday. “We have plans to basically develop all of that very valuable center-strip property as soon as we emerge. Those assets will have a very high-return, low-risk profile,” said Mr. Frissorra.
Cost Saving Drive
Caesar’s has enjoyed robust growth over the past two years due to a shift of focus into the real estate business. Renovation of hotel rooms has come into play in recent years. The company has also embarked on a cost saving drive as it continues to look for ways to strengthen its balance sheet.
A third of the company’s guests now use self-service kiosks allowing it to save a lot on the freeing up of hotel staff. Reduction of promotional costs has also come into play as part of the cost saving drive.
The gaming company plans to expand abroad as it seeks to broaden its target market. Japan, South Korea, Canada and Brazil are some of the markets that the company has set its eyes on as part of the expansion drive.
Caesars Entertainment stock was up by 1.62% in Thursday’s trading session ending the day at $12.55 a share.