Could WSOP 2016 Be The Last Run By Caesars?

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Monday, June 13th, 2016 | Written by Charles Washington

Rumor has it that there could be big changes in store for next year’s World Series of Poker. In mid-May, the Wall Street Journal ran a piece about the future of Caesars Interactive Entertainment (CIE), the subsidiary of Caesars Entertainment that owns the World Series of Poker. The story stated that Caesars Entertainment is accepting bids through the Raine Group investment bank for the sale of Caesars Interactive Entertainment and that presently bids have come in above $4 billion.

Bankruptcy Is Not the Motivation

Caesars Entertainment Operating Company is currently in the midst of bankruptcy proceedings, and Caesars Entertainment has pledged $4 billion to help restructure the debt of this subsidiary to end the process. Although the size of the deal matches up to the reported size of the bids on Caesars Interactive Entertainment, the two matters appear to be unrelated. Caesars Entertainment is raising the funds by merging with Caesars Acquisition Company and issuing bonds, which combined with equity would generate the total sum of $4 billion.

The Value of CIE

Some industry insiders are wondering if $4 billion is a fair price for the acquisition of Caesars Interactive Entertainment. While the World Series of Poker is a well-known brand, the company’s revenues don’t seem to be high enough to warrant such a high asking price. Even though Caesars Interactive Entertainment is one of the biggest money maker’s for Caesars Entertainment, Caesars Interactive Entertainment brought in $766.5 million in revenues. If the sale price is being calculated as a multiple of revenues, $4 billion appears to be too steep a price.

Who Might End Up Buying CIE?

The Wall Street Journal doesn’t provide any insight into who might be bidding on the purchase of Caesars Interactive Entertainment; however, there are some companies that industry experts believe could be considering the acquisition, including:

– 888 Holdings. While 888 Holdings could benefit from owning Caesars Interactive Entertainment to grow the size of its footprint in the U.S. market, the company passed on the chance to buy bwin.party last year, making it a possible, but unlikely potential buyer.

– CVC Capital Partners. The owner of SkyBet, CVC Capital Partners would likely have the ability to purchase Caesars Interactive Entertainment. The company has already shown interest in expanding their online poker portfolio, having bid to buy Betfair in 2015. Ultimately, they were unable to seal the deal, so the company might jump at the chance to try again.

– Amaya. Owning the World Series of Poker brand would definitely be a feather in the cap of Amaya, so it’s likely the company has interest in a deal. Still, Amaya already has taken on large amounts of debt for previous deals and may have difficulty securing funding to purchase Caesars Interactive Entertainment.

– Social Gaming Companies. The most likely candidates for purchasing Caesars Interactive Entertainment are social gaming companies. Buying the subsidiary would give a company like Zynga or IGT the ability to expand into new verticals. Both companies likely have the ability to raise the funds or have the capital on hand to buy Caesars Interactive Entertainment.

WSOP 2016 Underway

Caesars took over running the WSOP in 2005, and while the next tournament series may not be held at the Caesars owned Rio All-Suite Hotel & Casino, it is certain that it will still take place in the USA’s gambling mecca of Las Vegas. That is where the inaugural WSOP was held back in 1970, and it would be inconceivable for it to be held in any other city stateside.

In the meantime, the 47th Annual World Series of Poker is currently in full flow in Vegas, with its 69 event schedule culminating in the $10k Main Event final table being reached in July, after which the tournament will go on an extended break until November.

Already, a number of pros have notched up bracelets at this year’s poker extravaganza, including Robert Mizrachi who picked up a 4th career bracelet, Rep Porter a 3rd bracelet, and Paul Volpe bracelet number 2. Disgraced former Full Tilt Poker executives, Howard Lederer and Chris ‘Jesus’ Ferguson have also decided to end their self-imposed bans, and have now rejoined the action. Ferguson has already cashed in two events, while Lederer has still to make the money.