Caesar’s 2.2 Billion Dollar Casino Acquisition

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Casinos are places loved by every gambler out there. They may not always win but placing bets is what they do, and do a lot. On an average, of all the money that a gambler puts on stakes, they return home with only 90% of it. Overall, it is a loss for most of them. With table games like poker, roulette and blackjack, the odds may be better, but gamblers do not always have that edge. Most often, it is the house that wins.  And when this happens, investor’s cash in on it and purchase casino stocks.

Investors love casinos because they are popular, and can provide them with amazing returns. Consider the latest happenings in the industry, like the sale of four properties by Caesars Entertainment Corp.

The market situation is attractive for most of casinos, but not for one of the biggest names in the industry.  Caesars released its quarterly report for this year and the stats have not been that great. The revenues show a slight decline, and may have decreased even more had it not been for their overnight guests where the average daily room rate increased $3 to nearly $111 in 2013.

In the past month, Caesars sold off Bally’s Las Vegas, The Cromwell, The Quad and Harrah’s New Orleans in a deal that was worth $2.2 billion. At that time, the acquisition made financial sense, but the overall results differ from the predictions that were made.

The performance is not that great, but are the investors complaining? Not really because as far as the stocks are concerned, their worth has increased by three times in the last two years, ever since they were made public.

What about other casinos? The situation is good enough for them and they are putting up an above par performance.  Their shares have increased; the maximum recorded value of which is 17% for a reputed gaming company. If you factor in the past year or the year before that, the shares’ value has doubled for a lot of casinos.

The shares’ worth continues to rise and people continue to visit. Gamblers have increased in numbers and this has benefitted the industry significantly.  Pick up the stats of the past year, and you will notice that casino visitors are around 40 million for that year in all the biggest gaming regions.

If you bet in a casino, you may lose money but if you invest in one, your loss chances are very slim.

Source: www.dailyfinance.com

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