The Associated Press has reported that Caesars Entertainment Corp., one of the world’s largest gambling companies, is now moving forward with an initiative to allow other developers to use its brand name to build non-gambling hotels.
According to the AP report, the Caesars Global Life unit will help develop hotel properties outside the United States through licensing, franchise and management agreements. Caesars also said it wants the unit to mainly expand its presence in Asia and Latin America.
CEO Gary Loveman reportedly feels like the plan will lead to more opportunities for the company to build casinos.
We’ve seen this type of move before. And in all likelihood, what Caesars would ideally like to happen is to be able to open up their own casino in the land flowing with milk and honey as far as gambling dollars are concerned, Asia. Obviously, non-gambling hotels aren’t the bread and butter of the company’s revenue stream.
MGM Resorts International made a similar initiative two years ago. After establishing a brand presence in China, this year MGM took majority control of their Macau business by boosting MGM Resorts’ ownership in MGM China to 51%. That move now permits MGM Resorts to consolidate results from MGM China in its financial statements, which is significant as it will permit MGM Resorts to report financial results with higher revenue and operating income.
Caesars is likely hoping to follow a similar path with expansion outside of the United States.
