Caesars World

Caesars World was an American hotel and casino company whose corporate history began with a restaurant business and ended with the consolidation of its gaming assets into Park Place Entertainment. The company was established through the expansion of Lum's, a Miami Beach hot-dog restaurant acquired by brothers Stuart and Clifford Perlman in 1956. Lum's grew into a publicly traded restaurant chain, but the Perlmans pursued a broader acquisition strategy during the 1960s, buying businesses in areas ranging from food processing to retail and resort hospitality. The decisive change came in 1969, when Lum's acquired Caesars Palace on the Las Vegas Strip for $58 million. The purchase redirected the company toward gaming and destination resorts. In 1971, the restaurant chain was largely sold to John Y. Brown, then associated with Kentucky Fried Chicken, and the corporation adopted the name Caesars World. Caesars subsequently concentrated on building a portfolio around the Caesars identity, while also experimenting with technology investments, regional casinos, resort properties, cruise-ship gaming, and prospective tribal and commercial casino projects. Its principal assets included Caesars Palace in Nevada, Caesars Atlantic City in New Jersey, Caesars Tahoe near Lake Tahoe, several Poconos honeymoon resorts in Pennsylvania, and a minority interest in the company operating Casino Windsor in Ontario. The company also operated casinos on Crystal Cruises ships and pursued development opportunities in Palm Springs and New Orleans, although some of those projects were delayed, abandoned, or lost to competing operators. Caesars World’s expansion was accompanied by regulatory and governance challenges. Relationships involving Miami lawyer Alvin Malnik and Sam Cohen attracted scrutiny from Nevada gaming authorities and later became central to the New Jersey Casino Control Commission’s refusal to grant the Perlman brothers permanent gaming licenses. Caesars World bought the brothers’ 18 percent interest in 1980, and Clifford Perlman subsequently left the leadership of the Las Vegas property. The company later faced takeover pressure from financier Martin Sosnoff and Donald Trump, adopting defensive financial and corporate measures in response. Ownership changed several times in the 1990s. ITT Corporation acquired Caesars World in 1995 for $1.7 billion. After ITT was acquired by Starwood in 1998, Starwood elected to sell its gaming operations. Park Place Entertainment purchased Caesars World’s principal gaming business in 1999 for approximately $3 billion, while Starwood retained the Poconos resorts and licensed use of the Caesars name. The Caesars World corporate entity therefore ceased to operate independently, although the Caesars name survived through later corporate renamings and became part of the modern Caesars Entertainment lineage.

Caesars World originated in the restaurant sector. In 1956, Stuart and Clifford Perlman acquired a Miami Beach hot-dog stand operating under the Lum's name and expanded it into a larger chain. The business became publicly traded in 1961 and began franchising in 1965 in partnership with Ken Chivers. Within a short period, the chain grew from roughly fifteen restaurants to about ninety. During the second half of the 1960s, however, the Perlmans pursued diversification rather than remaining focused on food service. Lum's bought a meat-packing business, an army-and-navy store chain, and the Cove Haven honeymoon resort in Pennsylvania’s Poconos region. The major strategic turning point was the 1969 acquisition of Caesars Palace on the Las Vegas Strip. The property cost $58 million and brought the company into the casino and destination-resort industry. Lum's subsequently sold approximately 350 restaurants, representing nearly the entire chain, to John Y. Brown for $4 million in 1971. The corporation then changed its name to Caesars World, signaling that casino hospitality had become its central business. During the 1970s and 1980s, Caesars World assembled a portfolio of casinos and resorts while also making several non-core investments. It acquired a stake in Centronics, a producer of printers and gaming-control systems, and later bought Ontel Corporation, a personal-computer manufacturer. Both technology ventures were eventually divested. In gaming and hospitality, the company bought the Thunderbird casino in 1972 and considered a major Mark Anthony resort project, but financing could not be secured and the property was sold in 1976. Caesars expanded its Poconos holdings through acquisitions of Paradise Stream Resort, Pocono Palace, and Brookdale-on-the-Lake, which was renamed Caesars Brookdale. In 1979, it entered northern Nevada by taking over operations of Park Tahoe under a lease arrangement and investing in the hotel component; the property became Caesars Tahoe. Caesars World’s Atlantic City strategy created a serious regulatory crisis. After New Jersey legalized casino gambling, the company acquired a Howard Johnson’s hotel on the Boardwalk and spent about $70 million converting it into Caesars Boardwalk Regency, which opened in 1979 as the city’s second casino. The New Jersey Casino Control Commission later denied permanent gaming licenses to the Perlmans, citing their business dealings with Alvin Malnik and Sam Cohen, whose associations had drawn law-enforcement concern. The brothers were required to leave the company or risk the casino’s closure. Caesars World ultimately purchased their 18 percent stake for $98 million in 1980. Clifford Perlman remained connected with Caesars Palace for a time but left its chairmanship in 1982 after further regulatory pressure. The company subsequently faced corporate control battles. Martin Sosnoff built a substantial stake and attempted a takeover in 1987. Caesars responded with a proposed leveraged recapitalization and later a $400 million share-repurchase plan. A second challenge emerged when Donald Trump acquired a minority position in 1988 and disclosed an intention to seek a much larger stake. Caesars adopted a poison-pill defense, while Trump eventually withdrew and sold his shares. Alongside these disputes, the operator pursued new forms of distribution and development. It placed casinos on Crystal Cruises ships beginning in 1989, explored a tribal casino with the Agua Caliente Band in Palm Springs, and sought involvement in the proposed New Orleans casino project. The Palm Springs venture ended after litigation and political opposition, while the New Orleans opportunity was ultimately awarded to another group; Caesars later settled related litigation with Christopher Hemmeter. Caesars World also expanded into Canada. In partnership with Circus Circus Enterprises and Hilton, it won the bid to develop and operate a casino in Windsor, Ontario. An interim casino opened in 1994, followed by a riverboat casino in 1995. Both were replaced before the permanent Casino Windsor opened in 1998, with Caesars World holding a minority interest in the operating company. The final phase was a sequence of acquisitions. ITT Corporation bought Caesars World in 1995 for $1.7 billion. ITT was acquired by Starwood in 1998, and Starwood’s management decided to dispose of gaming assets in favor of upscale hotel operations. Park Place Entertainment acquired Caesars World’s main gaming business in 1999 for about $3 billion. The Poconos resorts were excluded from the transaction and remained with Starwood under a license allowing continued use of the Caesars brand. Caesars World therefore disappeared as an independent operator, although the corporate name and brand lineage continued through Park Place’s 2004 renaming as Caesars Entertainment and subsequent ownership changes.

• 1999

  Caesars World absorbed by Park Place Entertainment

  [1]Caesars Worlden.wikipedia.org

  Park Place Entertainment completed the acquisition of the principal Caesars World gaming business.

• 1998

  Permanent Casino Windsor opens

  [1]Caesars Worlden.wikipedia.org

  The permanent Casino Windsor opened after the interim and riverboat facilities were closed.

• 1995

  ITT acquisition

  [1]Caesars Worlden.wikipedia.org

  ITT Corporation acquired Caesars World for $1.7 billion.

• 1994

  Interim Casino Windsor opens

  [1]Caesars Worlden.wikipedia.org

  The Caesars-led partnership opened an interim casino in Windsor, Ontario.

• 1989

  Caesars Palace at Sea begins operations

  [1]Caesars Worlden.wikipedia.org

  Caesars World began operating a casino aboard Crystal Cruises’ Crystal Harmony.

• 1979

  Atlantic City and Tahoe expansion

  [1]Caesars Worlden.wikipedia.org

  The company opened Caesars Boardwalk Regency in Atlantic City and took over operations of Park Tahoe in Nevada.

• 1972

  Thunderbird acquisition

  [1]Caesars Worlden.wikipedia.org

  Caesars World bought the Thunderbird casino on the Las Vegas Strip.

• 1971

  Restaurant assets sold and company renamed

  [1]Caesars Worlden.wikipedia.org

  Nearly the entire restaurant chain was sold, and Lum's Inc. became Caesars World.

• 1969

  Acquisition of Caesars Palace

  [1]Caesars Worlden.wikipedia.org

  Lum's purchased Caesars Palace for $58 million, changing the company’s strategic direction.

• 1961

  Lum's becomes publicly traded

  [1]Caesars Worlden.wikipedia.org

  The growing restaurant company entered the public markets.

• 1956

  Perlman brothers acquire Lum's

  [1]Caesars Worlden.wikipedia.org

  Stuart and Clifford Perlman acquired a Miami Beach hot-dog stand and began expanding it into the Lum's restaurant chain.

A premium, entertainment-led casino and resort operator built around the Caesars Palace identity, with a focus on destination gaming, hotels, hospitality, and branded leisure experiences.

• Casino resort · 1969

  Caesars Palace

  The Las Vegas Strip property acquired in 1969 was the central asset around which Caesars World built its identity. It represented the company’s shift from restaurants into casino hospitality and functioned as its flagship luxury resort.

• Casino resort · 1979

  Caesars Atlantic City

  Opened as Caesars Boardwalk Regency in 1979 after the conversion of a Howard Johnson’s hotel, the property was Caesars World’s principal Atlantic City casino and one of the company’s most important expansions beyond Nevada.

• Casino resort · 1979

  Caesars Tahoe

  Caesars World took over operations of Park Tahoe in 1979 under a lease agreement and invested in completing its hotel facilities. The property was subsequently known as Caesars Tahoe and extended the brand into the Lake Tahoe market.

• Leisure resorts

  Caesars Pocono Resorts

  The Poconos portfolio included Cove Haven, Paradise Stream, Pocono Palace, and Caesars Brookdale. These properties focused on honeymoon and couples’ resort hospitality rather than conventional casino operations and remained with Starwood after the 1999 sale.

• Casino · 1998

  Casino Windsor

  Caesars World partnered with Circus Circus Enterprises and Hilton to develop Windsor’s casino operation. After interim and riverboat phases, the permanent Casino Windsor opened in 1998, with Caesars World holding a 33 percent stake in the operating company.

• 1980

  Regulatory challenge involving the Perlman brothers

  The New Jersey Casino Control Commission denied permanent gaming licenses to Stuart and Clifford Perlman after examining their dealings with Alvin Malnik and Sam Cohen. The licensing dispute forced the brothers out of active control and led Caesars World to buy their stake.

  Source

Read more

• 1989Caesars Palace at Sea

  International cruise routes

  Caesars World extended its casino brand to cruise ships by operating Caesars Palace at Sea aboard Crystal Harmony. A second shipboard casino followed on Crystal Symphony in 1995.

  Outcome. The casinos produced limited direct earnings but were treated as promotional exposure for the Caesars brand.

  Source

• 1999

  Sale to Park Place EntertainmentM&A

  Background

  Starwood decided to sell its gaming businesses and retain a stronger focus on upscale hotels.

  Action taken

  Park Place Entertainment purchased the principal Caesars World gaming business while excluding the Poconos resorts.

  Aftermath

  Caesars World ceased to operate independently. Park Place later adopted the Caesars Entertainment name, preserving the brand lineage.

  Acquisition price. Approximately $3 billion (1999)

  Source

• 1995

  Sale to ITT CorporationM&A

  Background

  Caesars World was an established multi-property casino operator with assets in Nevada, New Jersey, Pennsylvania, and Ontario.

  Action taken

  ITT Corporation acquired the company.

  Aftermath

  Caesars World became part of a larger hotel and gaming conglomerate before being resold through Starwood’s asset strategy.

  Acquisition price. $1.7 billion (1995)

  Source

• 1980

  Buyout of the Perlman brothersOther

  Background

  The New Jersey licensing dispute made the founders’ continued ownership and management of the gaming company difficult.

  Action taken

  Caesars World purchased Stuart and Clifford Perlman’s 18 percent interest.

  Aftermath

  The founders’ direct ownership ended, although Clifford Perlman remained associated with Caesars Palace until 1982.

  Purchase price for founders’ stake. $98 million (1980)

  Source

• 1971

  Exit from the restaurant businessStrategy

  Background

  After acquiring Caesars Palace, management chose to make gaming and resort hospitality the company’s dominant activity.

  Action taken

  Caesars World sold approximately 350 restaurants and changed its name from Lum's Inc. to Caesars World.

  Aftermath

  The company became identified primarily with casino resorts rather than food service.

  Restaurant chain sale. $4 million (1971)

  Source

• 1969

  Purchase Caesars PalaceM&A

  Background

  Lum's had diversified beyond restaurants, but the acquisition of the Las Vegas resort offered a path into the higher-growth casino and destination-hospitality sector.

  Action taken

  The company bought Caesars Palace for $58 million.

  Aftermath

  The acquisition became the foundation of the company’s gaming strategy and led to the 1971 corporate renaming.

  Acquisition price. $58 million (1969)

  Source

1. 1Caesars Worlden.wikipedia.org