Caesars World

{{Infobox company

|name=Caesars World

|logo=

|former_name=Lum's Inc. (1956–1971)

|industry=Gaming

|predecessor=

|fate=Acquired by Park Place Entertainment

|key_people=

|founder=Clifford S. Perlman|

|location_city=Paradise, Nevada

|location_country=U.S.

|foundation={{Start date and age|1956}}

|defunct={{End date and age|1999}}

}}

Caesars World Inc. was a hotel and casino operator. It began as Lum's Inc., owner of the Lum's chain of restaurants. It shifted into the gaming business with the purchase of Caesars Palace on the Las Vegas Strip in 1969, selling off the restaurants and changing its name. Caesars grew to eight casinos and resorts over the years, until going through a series of ownership changes beginning in 1995 and was ultimately absorbed by Park Place Entertainment in 1999.

History

File:Lum's hot dog restaurant Fort Lauderdale, Florida.jpg, Florida in 1966]]

In 1956, brothers Stuart and Clifford Perlman bought a hot dog stand in Miami Beach named Lums. They expanded to more locations, and took the company public in 1961. In partnership with Ken Chivers, they began offering franchises in 1965, growing from 15 restaurants to 90 within a few months.{{cite news|title=Getting a N.J. gambling license is not easy|newspaper=Montreal Gazette|first=Ellen|last=Karasik|agency=Philadelphia Inquirer|date=April 28, 1979|access-date=2012-04-21|url=https://news.google.com/newspapers?id=ZJcuAAAAIBAJ&pg=7078%2C676810}}

In the late 1960s, Lum's went on a buying spree, acquiring a meat packer, a chain of army-navy stores, and the Cove Haven honeymoon resort in the Poconos. They capped it off with Caesars Palace, bought in 1969 for $58 million. Shifting its focus to the Las Vegas property, the company in 1971 sold 350 restaurants, nearly the entire chain,{{cite news|title=New Lum's operators laying foundation|newspaper=Miami News|first=Alan|last=Gersten|date=September 30, 1971|access-date=2012-04-21|url=https://news.google.com/newspapers?id=ua0lAAAAIBAJ&pg=1828%2C3690354}} to John Y. Brown, owner of Kentucky Fried Chicken, for $4 million,{{cite news|title=Look for Lums to change hands|newspaper=Miami News|date=November 16, 1971|first=Herb|last=Rau|access-date=2012-04-21|url=https://news.google.com/newspapers?id=FtBWAAAAIBAJ&pg=2829%2C2063118}} and changed its name to Caesars World.{{cite news|title=Caesars Earns Niche in Gaming Pantheon|newspaper=Casino City Times|agency=Gaming Wire|first=Chris|last=Jones|date=July 21, 2004|access-date=2012-04-21|url=https://www.casinocitytimes.com/chris-jones/article/caesars-earns-niche-in-gaming-pantheon-54341}}

In 1971, the company made a foray into the technology sector, buying 21 percent of Centronics, a maker of printers and gaming control systems, from co-founder Samuel Lang for $1.7 million.{{cite news|title=Caesars World Inc. Disputing Centronics Over Lease, Stock|date=May 11, 1972|newspaper=Wall Street Journal|id={{ProQuest|133696453}}}} {{subscription required}} Caesars sold part of its stake to Brother Industries in 1974 for $3 million,{{cite news|title=Brother International Corp.|date=January 4, 1974|newspaper=Wall Street Journal|id={{ProQuest|133845114}}}} {{subscription required}} and then sold its remaining shares in a public offering for $3.5 million.{{cite news|title=Centronics Data Computer|date=February 15, 1974|newspaper=Wall Street Journal|id={{ProQuest|133875002}}}} {{subscription required}}

In 1972, Caesars World bought the Thunderbird casino, up the Strip from Caesars Palace, from Del Webb Corporation for $13.6 million.{{cite news|title=Caesars World closes hotel deal|newspaper=Miami News|url=https://news.google.com/newspapers?id=iNUzAAAAIBAJ&pg=3557%2C576075|date=November 1, 1972|access-date=2012-04-22}} A $150-million, 2,000-room resort called the Mark Anthony was planned for the site, but Caesars was unable to find financing,{{cite news|title=Las Vegas hotel plan canceled|newspaper=Press-Courier|location=Oxnard|date=June 12, 1975|agency=AP|url=https://news.google.com/newspapers?id=uBdLAAAAIBAJ&pg=7062%2C3142752|access-date=2012-04-21}} and sold the property four years later for $9 million to a group led by banker E. Parry Thomas.{{cite news|title=Caesars World Agrees To Sell Hotel-Casino To Group for $9 Million|newspaper=Wall Street Journal|date=September 15, 1976|id={{ProQuest|133987703}}}} {{subscription required}}

The company moved its headquarters from Miami in 1973 to be closer to Caesars Palace, but chose Century City in Los Angeles over Las Vegas, because of its proximity to financial centers.{{cite news|title=Miami firm will move to Calif.|newspaper=Ocala Star-Banner|agency=AP|date=January 14, 1973|url=https://news.google.com/newspapers?id=Uk1QAAAAIBAJ&pg=2816%2C2584231|access-date= May 3, 2012}}

Caesars extended its presence in the Poconos, buying the Paradise Stream Resort in 1973, the Pocono Palace in 1976,{{cite news|title=Pocono resorts, lawmakers play with the idea of legal gambling|newspaper=Philadelphia Inquirer|first=David|last=Iams|date=May 8, 1983|access-date=2012-05-23|publisher=via NewsBank|url=https://iw.newsbank.com/apps/news/document-view?p=WORLDNEWS&docref=news/0EB295682EBC4E5F}} {{subscription required}} and Brookdale-on-the-Lake in 1983, which it renamed as Caesars Brookdale.{{cite news|title=4th resort purchased by Caesars|newspaper=Reading Eagle|agency=UPI|url=https://news.google.com/newspapers?id=cFMiAAAAIBAJ&pg=6493%2C1198610|date=March 13, 1983|access-date=2012-04-24}}

The firm returned to the computer industry in 1976, buying 80 percent of Ontel Corporation (Woodbury, NY), a maker of all-in-one PCs.{{cite news|title=Caesars World Acquires 79.6% Holding in Ontel Corp.|newspaper=Wall Street Journal|date=April 20, 1976|id={{ProQuest|134096116}}}} {{subscription required}} Caesars had increased its stake to 100 percent by 1980, when it sold 9 percent of Ontel to AEG-Telefunken for $3.5 million.{{cite news|title=AEG Invests in Ontel|newspaper=Wall Street Journal|date=June 17, 1980|id={{ProQuest|134379522}}}} {{subscription required}} By 1983, the subsidiary was losing money, and Caesars sold it to Visual Technology, Inc. (Tewkesbury, MA), a maker of computer terminals, for a $9.5 million convertible note.{{cite news|title=Caesars Completes Sale of Ontel Corp. To Visual Technology|newspaper=Wall Street Journal|date=January 4, 1983|id={{ProQuest|134861437}}}} {{subscription required}}

Caesars expanded to northern Nevada in 1979, taking over operations of the Park Tahoe casino in Stateline, on the south shore of Lake Tahoe, under a lease agreement with Park Cattle Corp.{{cite news|title=Takeover of resort in offing|newspaper=Spokane Daily Chronicle|date=August 29, 1979|agency=AP|url=https://news.google.com/newspapers?id=5VZOAAAAIBAJ&pg=6916%2C4485834|access-date=2012-04-23}} Caesars agreed to spend $40 million to complete construction of the hotel portion of the year-old property,{{cite news|title=Caesars World board backs buying lease of hotel in Nevada|newspaper=Wall Street Journal|date=October 23, 1979|id={{ProQuest|134353780}}}} {{subscription required}} which was renamed as Caesars Tahoe Palace,{{cite news|title=Reno – after the money's gone|newspaper=Oakland Post|first=Terry|last=Young|date=December 4, 1979|id={{ProQuest|371722794}}}} {{subscription required}} and later simply Caesars Tahoe.

=Atlantic City and ouster of the Perlmans=

In the early 1970s, the company had entered into a series of deals with Miami lawyer Alvin Malnik, who was identified by federal law enforcement officials as a close associate of mobster Meyer Lansky. Caesars bought 400 acres of undeveloped land in North Miami Beach from Malnik and his partner, Sam Cohen, and later made a sale and leaseback of two of the company's Poconos resorts to Malnik and Cohen's sons, funded by a loan from a Teamsters pension fund. The association with Malnik earned Caesars three warnings from the Nevada Gaming Commission, and would continue to haunt the brothers.{{cite news|title=Perlmans balk sale of Caesars World|newspaper=Reading Eagle|date=January 7, 1981|access-date=2012-04-23|url=https://news.google.com/newspapers?id=v_QhAAAAIBAJ&pg=2855%2C3794731|agency=AP}}

After the 1976 legalization of gambling in Atlantic City, Caesars had bought a Howard Johnson's hotel on the Boardwalk and spent $70 million renovating it. Caesars Boardwalk Regency, the city's second casino, opened in 1979,{{cite news|title=Second casino opened|date=June 28, 1979|newspaper=Evening News|location=Newburgh, New York|access-date=2012-04-23|agency=AP|url=https://news.google.com/newspapers?id=i1tGAAAAIBAJ&pg=1092%2C3789720}} under a temporary license.{{cite news|title=Stuart Perlman, 60, Co-Founder Of Caesars World With Brother|newspaper=New York Times|first=Sarah|last=Lyall|url=https://www.nytimes.com/1988/01/06/obituaries/stuart-perlman-60-co-founder-of-caesars-world-with-brother.html|date=January 6, 1988|access-date=2012-04-23}} When the New Jersey Casino Control Commission (NJCCC) completed its full review of the Perlmans' applications, however, their permanent gaming licenses were denied, due to their dealings with Malnik and Cohen.{{cite news|title=Perlmans step aside, Caesars gets OK in N.J.|url=https://news.google.com/newspapers?id=Ob4lAAAAIBAJ&pg=4512%2C1972714|newspaper=Miami News|agency=AP|date=October 27, 1980|access-date=2012-04-23}} The brothers were forced to take a leave of absence, or face a shutdown of the casino. They negotiated to sell their interest in the company to television producers Norman Lear and Bud Yorkin, but quit the talks without reaching a deal. Analysts speculated that the company might sell the Atlantic City property,{{cite news|date=March 27, 1981|first=Pamela|last=Hollie|newspaper=New York Times|title=Analysts see a shift at Caesars|url=https://www.nytimes.com/1981/03/27/business/analysts-see-a-shift-at-caesars.html|access-date=2012-04-23}} but ultimately, Caesars World itself agreed to buy out the Perlmans' 18 percent stake for $98 million in 1980.{{cite news|title=Caesars World to buy founding firm|newspaper=Ocala Star-Banner|agency=AP|date=December 30, 1981|url=https://news.google.com/newspapers?id=96pPAAAAIBAJ&pg=2960%2C7157117|access-date=2012-04-23}} Clifford remained as chairman of the Las Vegas property until 1982, when he accepted the NJCCC's demand that he step down there as well.{{cite news|title=The Region|date=August 4, 1982|newspaper=New York Times|url=https://www.nytimes.com/1982/08/04/nyregion/the-region-061386.html|access-date=2012-04-23}}

Shortly after Clifford's departure from Caesars Palace, he and Stuart agreed to buy the Dunes hotel, across the street. Due to a non-compete clause in their buyout, Caesars was granted a four-week window to negotiate their own purchase of the Dunes, which they considered as an opportunity to reach the "tour and travel" segment of visitors, in contrast with Caesars Palace's more affluent customer base.{{cite news|title=Caesars Is Considering Offer for Dunes Hotel Near a Las Vegas Unit|newspaper=Wall Street Journal|date=December 22, 1982|id={{ProQuest|134700523}}}} {{subscription required}} Caesars ultimately decided not to pursue the purchase.{{cite news|title=Caesars Drops Bid For Dunes Hotel|date=January 8, 1983|newspaper=New York Times|url=https://www.nytimes.com/1983/01/08/business/caesars-drops-bid-for-dunes-hotel.html|access-date=2012-04-26}}

=After the Perlmans=

Financier Martin Sosnoff, who had accumulated a 13 percent stake in Caesars World, made an effort to take over the company in 1987, initially offering $734 million for the remaining shares, or $28 a share.{{cite news|title=Sosnoff studies new plan by Caesars World|date=April 7, 1987|newspaper=Schenectady Gazette|agency=AP|first=Roger|last=Gillott|url=https://news.google.com/newspapers?id=tBAhAAAAIBAJ&pg=2596%2C1607175|access-date=2012-04-29}} Caesars countered with a leveraged recapitalization plan that would have given investors a $26 dividend and left each share with a value of $8.50.{{cite news|title=Sosnoff raises bid for Caesars World|newspaper=New York Times|date=June 3, 1987|first=Alison|last=Cowan|url=https://www.nytimes.com/1987/06/03/business/sosnoff-raises-bid-for-caesars-world.html|access-date=2012-04-29}} Sosnoff raised his bid to $32 and then $35 a share, but after a court ruling that his offer exceeded federal limits on the amount of debt used in a takeover, he dropped his plan.{{cite news|title=Sosnoff gives up bid for Caesars World|newspaper=New York Times|first=Alison|last=Cowan|date=June 16, 1987|url=https://www.nytimes.com/1987/06/16/business/sosnoff-gives-up-bid-for-caesars-world.html|access-date=2012-04-29}} The company's recapitalization plan too was later rejected by the NJCCC because of the heavy debt burden involved,{{cite news|title=Ruling on Caesars startles Wall St.|newspaper=New York Times|first=Alison|last=Cowan|date=August 14, 1987|url=https://www.nytimes.com/1987/08/14/business/ruling-on-caesars-startles-wall-st.html|access-date=2012-04-29}} and the company instead undertook a $400 million stock repurchase program.{{cite news|title=Caesars World begins note offering linked to stock buy-back|date=September 30, 1987|newspaper=Wall Street Journal|id={{ProQuest|398054133}}}} {{subscription required}} Sosnoff did not participate in the buy-back, but sold two-thirds of his shares a month later, after the Black Monday crash.{{cite news|title=Sosnoff slashed his stake in Caesars in market crash|date=October 26, 1987|newspaper=Wall Street Journal|id={{ProQuest|135267958}}}} {{subscription required}}

Rumbles of another takeover attempt came in December 1988, when Donald Trump, who had bought a 2.4 percent stake in Caesars World,{{cite news|title=Trump stipulates investment curbs in casino sector|newspaper=Wall Street Journal|date=May 3, 1989|id={{ProQuest|135396156}}}} {{subscription required}} filed a Hart-Scott-Rodino notice of his intent to acquire at least a 15 percent stake, and said he might seek majority control.{{cite news|title=Caesars World stake sought by Trump, who may try to get control of concern|newspaper=Wall Street Journal|date=December 14, 1988|first=Pauline|last=Yoshihashi|id={{ProQuest|398157115}}}} {{subscription required}} Trump planned to sell Caesars Atlantic City, and attach the Caesars brand to his unfinished Taj Mahal casino. Caesars adopted a poison pill plan to deter any hostile takeover.{{cite news|title=Caesars World Inc. adopts rights plan to deter hostile bids|newspaper=Wall Street Journal|date=January 11, 1989|id={{ProQuest|398176408}}}} {{subscription required}} Trump dropped his plan and sold off his shares a few months later at a profit of $3.3 million, due to his concerns about heavy competition in the Las Vegas market.

Caesars agreed in 1989 to operate an onboard casino, Caesars Palace at Sea, on the Crystal Harmony, the first ship launched by Crystal Cruises.{{cite news|title=Cruise line owned by Japanese bets on floating casino|newspaper=Wall Street Journal|first=Pauline|last=Yoshihashi|date=April 5, 1989|id={{ProQuest|398213610}}}} {{subscription required}} Another casino on the Crystal Symphony followed in 1995. Caesars received "minute" earnings from the casinos, but considered them good marketing.{{cite news|title=Cruise ships lure gaming clients|newspaper=Las Vegas Review-Journal|first=Dave|last=Berns|url=http://www.reviewjournal.com/lvrj_home/1997/Mar-17-Mon-1997/business/5037839.html|date=Mar 17, 1997|access-date= May 3, 2012}}

In 1992, Caesars World won out over a dozen other companies to develop and operate a casino with the Agua Caliente tribe in downtown Palm Springs, California.{{cite news|title=Tribe to build Caesars casino|newspaper=Star-News|date=November 19, 1992|location=Wilmington, NC|url=https://news.google.com/newspapers?id=NaosAAAAIBAJ&pg=5563%2C1096168|access-date=2012-04-28}} The $25 million, 80,000 square foot casino would have been built across the street from the tribe's Spa Hotel.{{cite news|title=Caesars Plans $25-Million Palm Springs Indian Casino|newspaper=Los Angeles Times|date=November 16, 1993|first=Tom|last=Gorman|url=https://www.latimes.com/archives/la-xpm-1993-11-16-mn-57513-story.html|access-date=2012-04-28}} After being delayed by lawsuits and Governor Pete Wilson's opposition to Las Vegas-style gaming, the partnership was ended amicably in 1995.{{cite news|title=Caesars, Tribe End Pact to Build Casino in Palm Springs|date=April 5, 1995|newspaper=Los Angeles Times|first=Tom|last=Gorman|url=https://www.latimes.com/archives/la-xpm-1995-04-05-mn-51130-story.html|access-date=2012-04-28}} The Agua Caliente went on to open a smaller casino within the Spa Hotel that year.{{cite news|title=Tribe Tosses the Dice With Its Own Casino|newspaper=Los Angeles Times|date=June 19, 1995|first=Paul|last=Lieberman|url=https://www.latimes.com/archives/la-xpm-1995-06-19-mn-14796-story.html|access-date=2012-04-28}}

Caesars also made a try at the Louisiana market after the state in 1992 authorized its first land-based casino to be opened at the site of the Rivergate Convention Center in New Orleans. The firm was one of ten bidders for the site's lease,{{cite news|title=Louisiana Legislature Approves Casino Gambling|newspaper=New York Times|url=https://www.nytimes.com/1992/06/12/us/louisiana-legislature-approves-casino-gambling.html|date=June 12, 1992|first=Frances|last=Marcus|access-date=2012-04-28}} but quickly dropped its bid and instead signed a casino management agreement with the front-runner, resort developer Christopher Hemmeter, who proposed to build the biggest casino in the world, the $1 billion Grand Palais. Hemmeter won the city's lease selection process, but due to tension between the state and city governments, the process for awarding the one and only gaming license was separate, and the state casino board awarded it to a partnership between Harrah's Entertainment and Jazzville, a group of politically well-connected local investors.{{cite news|title=The Big Easy's bad bet|newspaper=Fortune|first=Peter|last=Elkind|date=December 8, 1997|url=https://money.cnn.com/magazines/fortune/fortune_archive/1997/12/08/234913/index.htm|access-date=2012-04-28}} Under pressure from Governor Edwin Edwards, Hemmeter joined forces with Harrah's and Jazzville, and Caesars World was sidelined from the project, which ultimately opened as Harrah's New Orleans. Caesars sued Hemmeter and reached a $5 million settlement.{{cite news|title=A 'Sure Thing' Gone Awry |date=December 2, 1996 |newspaper=Los Angeles Times |first=Michael |last=Hiltzik |url=https://www.latimes.com/archives/la-xpm-1996-12-02-mn-4939-story.html |access-date=2012-04-28}}

Caesars partnered with Circus Circus Enterprises and Hilton in a 1993 bid to build and operate a government-owned casino in Windsor, Ontario.{{cite news|title=Company news: Caesars, Circus Circus, and Hilton in casino deal|url=https://www.nytimes.com/1993/12/04/business/company-news-caesars-circus-circus-and-hilton-in-casino-deal.html|date=December 4, 1993|newspaper=New York Times|access-date=2012-04-26}} They won the bid, and opened an interim casino in 1994 and a riverboat casino in 1995, both of which were closed shortly before the permanent Casino Windsor opened in 1998.{{cite news|title=Windsor ups casino ante|url=http://www.highbeam.com/doc/1G1-21016349.html|newspaper=Crain's Detroit Business|date=July 20, 1998|first=Robert|last=Ankeny}}{{dead link|date=February 2019|bot=medic}}{{cbignore|bot=medic}} {{subscription required}}

File:Caesarspalace.jpg

=Acquisition and aftermath=

ITT Corporation, a conglomerate whose other assets included Sheraton Hotels and Resorts and the Desert Inn, bought Caesars World in 1995 for $1.7 billion,{{cite news|title=Company news; ITT attracts 94% of Caesars World's shares|newspaper=New York Times|date=January 26, 1995|url=https://www.nytimes.com/1995/01/26/business/company-news-itt-attracts-94-of-caesars-world-s-shares.html|access-date=2012-04-25}} and was then acquired in 1998 by Starwood.{{cite news| title=Starwood purchase of ITT is official |newspaper=Las Vegas Review-Journal |url=http://www.reviewjournal.com/lvrj_home/1998/Feb-24-Tue-1998/business/7014791.html|date=February 24, 1998|access-date=2012-04-25|first=Dave|last=Berns}}

Starwood head Barry Sternlicht opted to sell off ITT's gaming businesses, preferring the stable cash flow of upscale hotels to volatile casino winnings.{{cite news|title=Wynn pursues Caesars|newspaper=Las Vegas Review-Journal|date=April 22, 1999|first=Dave|last=Berns|access-date= May 1, 2012|url=http://www.reviewjournal.com/lvrj_home/1999/Apr-22-Thu-1999/business/11035297.html}} Interested parties included Mirage Resorts, Sun International, and Park Place Entertainment, the newly spun-off gaming unit of Hilton. Park Place ultimately won, buying Caesars for $3 billion,{{cite news|title=Park Place considers adding new tower to Caesars Palace|newspaper=Las Vegas Review-Journal|first=Dave|last=Berns|url=http://www.reviewjournal.com/lvrj_home/2000/Feb-02-Wed-2000/business/12873066.html|date=February 2, 2000|access-date=2012-04-25}} though it did not buy the Desert Inn due to its weak location and lack of foot traffic. Starwood also retained the Poconos resorts, with a 10-year license to continue using the Caesars brand.{{cite news|title=Caesars' three resorts in Poconos switch branding to Starwood|newspaper=Pocono Record|first=Beth|last=Brelje|date=January 8, 2010|url=https://www.poconorecord.com/article/20100108/NEWS13/1080307|access-date=2015-06-17}}

The Caesars corporate name lived on, as Park Place changed its name to Caesars Entertainment in 2004,{{cite news|title=Business: Park Place hails change to Caesars|newspaper=Las Vegas Review-Journal|date=January 7, 2004|first=Rod|last=Smith|url=http://www.reviewjournal.com/lvrj_home/2004/Jan-07-Wed-2004/business/22934248.html}} and was bought in 2005 by Harrah's Entertainment,{{cite news|title=Gaming goliath springs to life|newspaper=Las Vegas Review-Journal|first=Howard|last=Stutz|date=June 14, 2005|url=http://www.reviewjournal.com/lvrj_home/2005/Jun-14-Tue-2005/news/26718893.html|access-date= May 1, 2012}} which changed its own name to Caesars Entertainment five years later.{{cite news |title=Harrah's changes corporate name to Caesars |url=https://www.bizjournals.com/stlouis/news/2010/11/23/harrahs-changes-corporate-name.html |newspaper=St. Louis Business Journal |date=November 23, 2010 |access-date=May 1, 2012}}