Caesars Sells Stake in Online Operations

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Caesars Entertainment has sold a percentage of its online gambling subsidiary, Caesars Interactive, to Rock Gaming. Caesars Entertainment is the largest chain of land casinos worldwide. Caesars Interactive operates an online casino and poker room in Europe and also the popular World Series of Poker tournaments. This news came through a filing with the Securities and Exchange Commission. The news is significant because Caesars is one of the biggest lobbyists for federal regulation of online gambling in the United States.

The filing reported that in all 12,300 shares were committed to Rock Gaming for $60.8 million. It did not state what percent of its holding this amounted to. Rock Gaming has purchased half of the committed shares and will acquire the balance by July 2. Rock Gaming has an option to purchase further 3,140 shares for $19.2 million by November 15.

Rock Gaming is controlled by Dan Gilbert, founder of Quicken Loans and owner of the NBA team Cleveland Cavaliers. Caesars and Rock Gaming are partners in two casino projects, in Cincinnati and Cleveland. Both casinos are named Horseshoe. Caesars owns 20 percent of the joint venture and will manage the casinos. No reason was given for the stock sale.

The other important online gambling news from the United States comes from New Jersey. The second attempt by Senator Lesniak to pass the law legalizing online gambling in the state has crossed its first hurdle, albeit a small one. The Senate Budget and Appropriations (SBA) Committee passed the online gambling bill. Eleven of the thirteen members of the SBA Committee voted in favor. Senator Paul Sarlo, the committee's chairman, abstained from the vote. This is probably because his constituency has the Meadowlands Race Track, which will be adversely affected by the bill. Senator Anthony Bucco did not vote.

The bill will allow Atlantic City casinos to offer online gambling services to New Jersey residents. The servers will have to be housed in Atlantic City to comply with the state constitution that prohibits the expansion of gambling beyond Atlantic City. The SBA also set a 10% tax on gross online gaming revenue, against the 8% tax on land gaming revenue. The bill addresses some of the objections Governor Chris Christie had raised when he vetoed a similar bill last year. It does not provide for additional money for the horse racing industry and requires that the marketing of online gambling be done only by the casinos offering it. If federal legislation is subsequently passed permitting online gambling across the country, New Jersey online casinos will then be allowed to accept bets from outside the state. This bill was co-sponsored by Senator Jim Whelan.

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