Caesars Selling World Series of Poker for $500 Million

Posted on: August 1, 2024, 04:06h. 

Last updated on: August 1, 2024, 06:28h.

Caesars Entertainment (NASDAQ: CZR) announced today that it’s selling the intellectual ?property rights associated with the World Series of Poker (WSOP) to investment firm NSUS Group Inc. for $500 million.

WSOP.com
A WSOP logo. Caesars is selling the poker series to NSUS for $500 million. (Image: WSOP.com)

The deal price consists of $250 million in cash and a $250 promissory note backed by WSOP’s intellectual property assets being sold. The note comes due five years from the closing date of the transaction, which is expected to occur before the end of this year.

It’s not immediately clear, but it is likely Caesars made a profit WSOP in some fashion. Then known as Harrah’s Entertainment, the company acquired WSOP and Binion’s Horseshoe Hotel and Casino in downtown Las Vegas for a mere $44.3 million in 2004. The operating rights to that casino were later sold back, but Caesars is still reaping a windfall from the sale of WSOP.

The acquisition of the Horseshoe and WSOP is ancient in terms of Caesars’ corporate history. It occurred prior to Harrah’s 2005 purchase of Caesars Entertainment for $10.4 billion. In 2008, private equity firms Apollo Management and TPG Capital L.P. took Harrah’s private in a deal valued at $27.8 billion. Caesars filed for bankruptcy protection in 2015 and it was sold to Eldorado Resorts for $17.3 billion in 2020. Bottom line: Caesars’ current management team, led by CEO Tom Reeg, had nothing to do with the acquisition of WSOP.

WSOP Move Jibes with Caesars Asset Sale Plans

Earlier this year, Reeg said Caesars is open to selling “non-core casinos” and while WSOP isn’t a land-based gaming venue, the sale fits with the operator’s established divestment precedent. For example, Caesars sold the international assets of William Hill after acquiring that bookmaker several years ago.

In a statement announcing the WSOP transaction, Caesars didn’t discuss plans for the proceeds, but it’s possible some of the capital will go toward trimming a debt burden that stood at $12.4 billion at the end of the second quarter. That is one of the industry’s largest tallies, but it’s steadily declined under the Reeg-led executive team.

Caesars Digital notched second-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) of $40 million, nearly quadruple the $11 million posted a year earlier, but the operator didn’t breakout how much of that figure was attributable to WSOP.

“Caesars Digital will also receive a license from NSUS to continue operating its recently upgraded WSOP Online real-money poker business in Nevada, New Jersey, Michigan, and Pennsylvania for the foreseeable future but will otherwise be restricted from operating online peer-to-peer real-money poker operations for a specified period of time and subject to certain exceptions,” according to the press release.

Caesars Also Retaining WSOP Tournament Rights

Under the terms of the agreement with NSUS, Caesars kept rights to host some WSOP tournaments at its casinos, including the Main Event — the biggest tournament in poker.

Caesars has secured the right from NSUS to continue hosting the WSOP’s flagship live tournament series at its Las Vegas casinos for the next 20 years. In addition, brick-and-mortar poker rooms currently operated by Caesars will continue to feature WSOP branding, and Caesars destinations will continue to enjoy preferential rights to host live WSOP Circuit (WSOP-C) events going forward,” according to the statement.

Won by Jonathan Tamayo last month, the WSOP Main Event was held at the Horseshoe and Paris on the Las Vegas Strip.