Caesars Palace getting $75 million update despite bankruptcy

AP News
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Posted: Oct 23, 2015 4:18 PM
Caesars Palace getting $75 million update despite bankruptcy

LAS VEGAS (AP) — Caesars Palace on the Las Vegas Strip is getting a $75 million upgrade for its 50th birthday despite facing a complicated bankruptcy reorganization and millions of dollars in fines.

Parent company Caesars Entertainment Corp. announced Friday that it's overhauling the hotel's original Roman Tower of rooms, last redone in 2001. The iconic Roman-themed property is the only Strip casino owned and operated by a Caesars subsidiary that is trying to shed $10 billion of its $18.4 billion in debt by restructuring.

Caesars Palace was recently fined $9.5 million by federal and state regulators for failing to take steps to prevent money laundering in the casino.

Chris Jones, a gambling industry analyst with Union Gaming, said it would be difficult for anyone involved in the bankruptcy case, including Caesars' creditors, to argue that a capital investment to improve the nearly 15-year-old rooms would be a bad call.

He said it doesn't help anyone if the tower, closed for construction since mid-September, isn't making money. The 567-room tower will get 20 additional rooms and a new name: the Julius Tower.

"It's a renovation that has to happen, considering how old the room product is," Jones said.

Caesars Palace, which opened on Aug. 5, 1966, and became a Hollywood favorite in movies such as "Rain Man" and "The Hangover," has grown to about 3,960 rooms spread across six towers.

"We continue to reinvent Rome . and Las Vegas" Caesars Palace regional president Gary Selesner said in a statement.

Renovated rooms are expected to be ready for overnight guests starting Jan. 1 and go for $149 a night on average — about $20 to $30 more than before.

The subsidiary, Caesars Entertainment Operating Co., which owns and operates 38 of the parent company's 50 casino-hotels worldwide, filed for Chapter 11 bankruptcy in January after being bogged down by a debt-heavy buyout in 2008 just as the recession took hold.

Other Caesars Entertainment Corp. subsidiaries that aren't directly affected by the bankruptcy, own the company's other Las Vegas properties, including a single hotel tower within Caesars Palace called Octavius Tower.

It was not clear if the spending to renovate Caesars Palace had been approved by the bankruptcy court in Chicago where the case is being heard or if it needed to be.