Businessmodel of Caesars Entertainment

Customer Segments

Caesars Entertainment principally provides gaming and gambling services to the general consumer population. The nature of the Company’s core services limits the Company’s customer demographics to those over the age of 21.

Caesars Entertainment’s casino properties are principally located in tourist hubs Las Vegas and Atlantic City. Consequently, a large portion of the Company’s customers are tourists, both international and domestic. Recent reports suggest that tourism is becoming a key source of revenue for the Company, with its customers spending the majority of funds on non-gaming entertainment, lodging and dining experiences. Reports suggest that older customers continue to be attracted by the Company’s gambling and gaming services, while younger customers are attracted by the Company’s high-end restaurants and brand-name shopping, such as that offered by its LINQ promenade.

Caesars Entertainment principally serves the US market, with its properties located in Las Vegas, Atlantic City, Laughlin, New Orleans, and Baltimore.

Value Propositions

Caesars Entertainment provides value to its customers in the following ways:

• Its brand recognition and industry standing, with the Company having one of the most recognisable brand names in the casino and Las Vegas tourism industry, with a reputation for operating high-quality facilities;
• Its broad range of attractions and services, with the Company operating a number of attractions, including shopping centres, hotels, and restaurants, in addition to its core casino and gaming operations;
• Its network of properties, with the Company operating 12 hotel and casinos developments across Las Vegas, Atlantic City, Baltimore, New Orleans and Loughlin, in particular controlling a substantial portion of the Las Vegas Strip;
• Its use of technology, with the Company utilising proprietary technologies in its gaming and gambling offerings, enabling it to provide unique and innovative games to its customers, which cannot be found at competing casinos; and
• Its industry expertise and experience, with the Company one of the longest-running companies in its industry, employing experienced industry executives. ### Channels

Caesars Entertainment operates a website at www.caesars.com, through which it provides information on its various locations, services, and activities. The Company’s website includes a hotel reservation portal, through which customers are able to make reservations at the Company’s various hotels across the US. It also operates an online customer portal, which allows customers to manage their accounts and earn loyalty rewards.

Caesars Entertainment’s Caesars Interactive Entertainment operates a number of online gaming channels for a range of customers. This includes various social games that are available through Facebook and other social media websites, as well as mobile application platforms, that utilise virtual currency. It also operates certain real money gaming platforms in a number of regions, including www.caesarscasino.com and www.caesarscasino.co.uk.

Much of Caesars Entertainment’s services are provided directly by its various members of staff across its network of 12 casino and hotel complexes in Las Vegas, Atlantic City, New Orleans, Loughlin, and Baltimore. This includes the Company’s various shopping and restaurant developments.

Customer Relationships

Caesars Entertainment provides a range of services to its customers on a self-service basis. This includes the Company’s online hotel booking portal, which enable customers to check availability, make reservations, and make payments without interacting with members of the Company’s sales personnel. The Company also operates a number of online gaming platforms, mobile apps, and social media games which customers are able to access and use independently.

Through its various physical outlets, including its casinos, hotels, and restaurant and shopping complexes, Caesars Entertainment is able to provide a greater degree of personal care. The Company’s on-site staff are able to provide in-person assistance to customers, handling complaints and queries directly, and offering guidance on the various facilities and attractions at its properties.

Caesars Entertainment’s online portals and platforms each have their own support teams which are able to respond personally to technical issues, booking enquires, and other queries. Customers are able to contact support personnel over the phone or via email, and are additionally given access to a range of online resources, such as FAQs and user guides.

Customers are also able to follow the activities of Caesars Entertainment, and interact with the Company directly through its social media accounts, including with Facebook, Twitter, and Google+.

Key Activities

Caesars Entertainment is a holding company. Through its various subsidiaries, the Company offers a range of casino-entertainment and hospitality services to general consumers in the US.

It aligns its operations into three reportable business segments: Caesars Entertainment Resort Properties, Caesars Growth Partners Casinos, and Caesars Interactive Entertainment. The Company owns and operates a network of facilities, including gaming and casino offerings, food and beverage outlets, hotel and convention spaces, and non-gaming entertainment options, such as shopping centres.

In addition to its physical properties, Caesars Entertainment also operates an online gaming business that provides social and mobile games that use virtual currency, as well as real money online gaming platforms in certain jurisdictions. The Company also owns and operates the World Series of Poker tournaments and brand.

Key Partners

Caesars Entertainment works closely with a range of companies and organisations in the delivery of its various services. These partners can be categorised broadly as:

• Supplier and Vendor Partners, comprising suppliers of technologies, equipment, and services that are utilised across the Company’s facilities and operating segments, as well as companies to which certain functions are outsourced;
• Loyalty Rewards Partners, comprising a range of commercial businesses which provide various discounts, products, and rewards to Caesars Entertainment customers as part of its loyalty scheme;
• Marketing and Affiliate Partners, comprising various websites and companies that drive traffic to the Company’s various online channels and attract customers to its services in return for commissions on sales; and
• Industry Partners, comprising various industry and regulatory bodies, with which the Company collaborates on promoting and the gaming and gambling industry. Caesars Entertainment has launched a number of partnerships in recent years. This includes an events partnership with Live Nation, a marketing alliance with Atlantis Paradise Island Resort, and a rewards partnership with Asia Miles.

Key Resources

Caesars Entertainment’s key resources are its brands and intellectual properties, its online platforms and portals, its IT and communications infrastructure, its network of casino and leisure complexes, its equipment and supply chain, its partnerships, and its personnel.

Caesars Entertainment’s key assets are its network of 12 casino and hotel complexes across Las Vegas, Atlantic City, Baltimore, New Orleans, and Loughlin, which are core to the Company’s operations.

Caesars Entertainment also owns numerous patents, trademarks, and properties that are key to its operations. Searches of records published by the US Patent and Trademark Office identified a number of patent applications in which the Company is named as applicant or assignee, including applications entitled ‘Real-time marketing at gaming machines’, ‘Skill based games of chance’ and ‘Coin cup holder for use with a gaming machine’.

Cost Structure

Caesars Entertainment incurs costs in relation to the development of its technologies and online portal, the maintenance of its IT and communications infrastructure, the operation of its casino and hotel complexes, the procurement and maintenance of its equipment, the implementation of advertising and marketing campaigns, the management of its partnerships, and the retention of its personnel.

In 2015 Caesars Entertainment recorded total operating expenses in the amount of $3.93 billion. This included property, general and administrative expenses totalling $1.28 billion and casino expenses totalling $1.12 billion.

Revenue Streams

Caesars Entertainment generates revenue through the operation of physical and online gaming services, as well as the operation of hotel and leisure complexes across the US. The Company derives revenue from four principal business lines:

• Casino operations, including revenue derived from slot machines, and table games, as well as games such as keno, poker, and race and sports books;
• Food and beverage operations, including revenue derived from the sale of food and drinks at its restaurants, bars, nightclubs, and lounges;
• Rooms and hotel operations, including revenue derived from hotel stays at its casino properties; and
• Interactive entertainment, including revenue derived from the Company’s various online gaming offerings. In 2015 Caesars Entertainment generated net revenue for the year of $4.65 billion, down considerably on the $8.52 billion recorded by the Company in 2014. This was attributed to the deconsolidation of Caesars Entertainment Operating Company form the Company’s financial results. The Company’s largest portion of the Company’s revenue came from its casino operations, which accounted for more than 40% of total annual revenue.