How does Caesars use the WSOP to help balance the books?
Yesterday saw the start of the 2014 World Series of Poker with the Casino Employee Event #1 and the $25,000 Mix Max Event #2 taking place in the Rio All Suite Casino and hotel in Las Vegas. With the busiest time of the year starting for the owners of the casino, how can Caesars use the WSOP to balance the books on their $20.9 Billion debt?
The World Series of Poker is arguably the biggest brand in Poker, with pretty much everyone who has played a hand of poker having heard of the big WSOP Events in Las Vegas every summer. Caesars took over the running of the WSOP back in 2004, and has managed to grow the series total number of entrants from 7,572 in the final Binion’s run series in 2003 to 79,471 last year for a very impressive growth of over 1000% in 10 years.
The WSOP itself is broadcast in 84 countries, making it available to 300 million households on five different continents around the world.
With the WSOP being such a massive brand around the world, how can Caesars Entertainment leverage this powerful tool in order to stop haemorrhaging money from it’s bank accounts? $20.9 Billion is a large debt to overcome, and while it was reduced by $2.1 Billion in the last quarter of 2013, it’s still the biggest debt in the business. The last quarter of 2013 saw more losses for the group, as they reported another $1.756 Billion in losses just for those three months alone. Apparently this was due to a poor market in Atlantic City, but investors had been pre warned about the losses. The one good point in the quarterly report was the net revenue of the company had risen by 3.2%.
Compared to both the Las Vegas Sands ($13.77 Billion Net Revenue in 2013) and Wynn Resorts (just over $1 Billion in Net Revenue in 2013) Caesars’ 2013 bottom line was a $2.95 Billion loss, most of which was caused by servicing the massive debt they have accumulated.
While Caesars has far east holdings, they are missing a Macau property, which is one of the reasons Las Vegas Sands and Wynn Resorts have seen their profits increase along with the Macau market.
It appears that Caesars needs to improve it’s income potential, and there may be more ways to wring more out of the WSOP Brand. In the USm the recent launches of the Nevada and New Jersey online platforms has been a good start, but the company remains rigidly US focussed. Caesars, and the rest of the US market, is still behind the curve when it comes to online offerings but they have improved their lot by partnering with 888 to provide their online poker client. With more US states moving towards regulation, there could be a second US poker boom in the next few years, and Caesar’s should be leading that charge with the WSOP brand. From what I understand from New Jersey contacts, the mainstream marketing for the WSOP has been poor, with little attempt to use the WSOP brand to engage recreational players. With the ESPN coverage of the 2014 WSOP being reduced from previous years, the 2 hour Saturday night highlight segments are going to be prime opportunities to show adverts like this one:
As you can see, the advert is actually very well done, but it, and the other adverts, are being sorely under used to promote Caesars’ online offerings. I’m also hoping they will be liberally sprinkled throughout the live streamed final tables from this year’s WSOP.
Talking about Live Streaming, the WSOP has improved their coverage in recent years, but with the reduced ESPN coverage this year only covering the Big One for One Drop and the Main Event, how good is the coverage of the live stream going to be?
Streaming content online is a growing medium, with thousands of hours of content being streamed though sites such as YouTube and Twitch every day. It’s currently mainly the video game market that is providing a lot of this content, but the format suits poker to a tee.
David Tuckman does provide some fantastic coverage and insight to the game on these streams, but the format is much more like sports coverage rather than recreational player friendly content such as the EPT live streams. The EPT Live team manages to walk the fine line between recreational friendly coverage and engaging the more hardcore viewer, and I think should act as the template for Poker live streams for the foreseeable future.
The WSOP brand seems to be offering Caesars Entertainment options to expand into the digital medium. Outside the USA, this is generally accepted as the day to day future of the industry, with brick and mortar casinos being a secondary part of the business.
Caesars Entertainment has the WSOP to help them start this process, but based on the lack of engagement with the process so far, I’m dubious if their plans are heading in this direction yet.