Caesars Entertainments Casino Expansion Strategy in Mexico
Casino Expansion: Caesars Entertainments Growth in Mexico
Caesars Entertainment is on an exciting development spree, announcing its third project within just two weeks, this time expanding its brand to Mexico.
The new venture is a partnership with Grupo Questro, a Mexican real estate development company. Together, they plan to manage a $200 million, non-gaming beachfront resort in Puerto Los Cabos, situated about 20 miles east of Cabo San Lucas on the Baja California peninsula.
This resort, to be known as Caesars Palace Puerto Los Cabos, will feature:
- 500 luxurious hotel rooms
- A 40,000-square-foot convention center
- A full-service spa
- Multiple dining options
- Dynamic entertainment spaces
- Two top-notch golf courses
Construction is expected to begin in the first half of 2019, marking a significant milestone in Caesars’ expansion strategy.
Caesars CEO Mark Frissora stated, “This plan represents further progress on our strategy to expand the company’s non-gaming businesses into premier resort and gateway destinations.” He highlighted that this is Caesars’ first investment in Mexico.
In this partnership, Grupo Questro will own the vacation complex, while Caesars will manage its operations and earn licensing and management fees.
Non-Gaming Name of Game
Recently, Caesars Entertainment also announced its inaugural non-gaming venture in Dubai. They have partnered with Meraas Holdings to operate two non-gaming resorts on Bluewaters Island, a man-made island in the Persian Gulf. Like Puerto Los Cabos, the Dubai properties will be managed by Caesars without ownership but will generate revenue through operational fees. These resorts will include:
- 479 guest rooms
- A beach club
- Indoor and outdoor pools
- A spa
- A convention center
Additionally, Caesars has announced plans for Harrah’s Northern California, a casino resort developed in collaboration with a Native American tribe near Sacramento.
Since emerging from Chapter 11 bankruptcy, Frissora mentioned that the casino operators plan to leverage the Caesars brand for future revenue growth, focusing primarily on providing their iconic name to both domestic and international hoteliers.
This strategy is appealing to lesser-known developers like Meraas and Grupo Questro, benefiting from Caesars Entertainment’s extensive membership base of over 55 million in its Total Rewards loyalty program.
Gambling in Mexico
While gambling laws vary greatly worldwide, much of it remains illegal in Mexico. Current regulations allow for parimutuel betting, bingo, raffles, and certain gaming lottery and sweepstakes terminals. However, casino-style gambling, readily available across the US, has been prohibited under the Federal Gaming and Raffles Law since 1947.
Recent trends indicate a growing desire to establish casinos within popular tourist destinations. Senator José Maria Martinez from Guadalajara is advocating for the legalization of casinos at resorts, arguing that the absence of regulations has led to the rise of illegal underground gambling operations throughout Mexico.
In numerous Caribbean nations, casino-style gambling is an essential part of the tourism experience, with resorts in places such as:
- Dominican Republic
- Aruba
- Bahamas
- Puerto Rico
These developments signal a possible shift in Mexico’s stance on gambling, potentially leading to a reformation of the regulations governing casino establishments.
Summary
Caesars Entertainment’s foray into Mexico underscores its commitment to expanding beyond traditional gambling operations. By focusing on non-gaming ventures and forming strategic partnerships, Caesars aims to elevate its brand globally while responding to local market trends. As gambling regulations in Mexico evolve, the potential for casino establishments at resorts may unlock new opportunities for growth and engagement in the vibrant Mexican tourism sector.
