- The Flamingo is one of the oldest casinos located on the Las Vegas Strip.
- Potential buyers seem fearful that the casino will lose money after its disconnection from the Caesars brand.
- Maintenance and upkeep of an older property is also an issue among buyers.
- Caesars seems to want to offload the casino due to issues with debt.
The Flamingo Casino in Las Vegas may have a new owner in the future if Caesars Entertainment is able to sell the property. The company is reportedly trying to get rid of the Flamingo at a price point of $1 billion.
According to sources, potential buyers have passed on the purchase due to the age of the casino as well as maintenance needs. Private equity firms and other casino operators have been contacted by Caesars for a potential sale with no luck yet in securing a deal for the sale.
An Older Casino on the Strip
The Flamingo is one of the oldest casinos located on the Las Vegas Strip. The casino was opened way back in 1946 for $6 million. The venue was constructed by gangster Bugsy Siegel and has enjoyed many decades of operation over the years.
Caesars is supposedly in the market to sell the casino in an effort to reduce company debt. The sale process was started earlier this year and will hopefully be completed in the summer, according to CEO Tom Reeg during a recent conference call. Caesars has around $13.5 billion in net debt by the first quarter’s end.
Reeg stated that when there are a lot of buyers involved, the work extends to the maximum deadline. If the company is able to finish one day ahead of six months, he will be pleased with the progress.
Another element that may stand in the way of the sale is the Caesars brand. The Flamingo currently uses the customer loyalty program of Caesars. It is expected that anyone who takes on the venue will lose a lot of customers as they follow where the rewards they earned go. One solution would be to offer a similar program to try and maintain gamblers.
Vici Properties Inc. is a real estate investment trust that has its hand in several Caesar’s venues. The trust has the ability to refuse the sale of specific casinos which includes the Flamingo. This could complicate any potential deal that Caesars is able to secure regarding the casino.
Continued Losses for the Company
The need to offload the Flamingo comes at a time when Caesars Entertainment has experienced continual losses. The company saw a widening of losses during the three-month period ending on March 31 when compared to the same time frame in 2021.
A net loss of $680 million was posted after a $423 million net loss during the first quarter of last year. Operating expenses were up to $2.3 billion in the first quarter of this year, which was higher than the $1.5 billion from last year.
With the sale of the Flamingo, Caesars would be able to recoup some losses which would help with the overall debt issues the company is facing.
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