Caesars to license non-gambling hotels

The Las Vegas casino company said yesterday that the unit, called Caesars Global Life, will help develop hotel properties outside the United States through licensing, franchise and management agreements. Caesars said it wants the unit to expand its presence particularly in Asia and Latin America.

Gary Loveman, the company's chief executive, said the plan would lead to more opportunities for the company to build casinos. Other major casino companies have gotten away from gambling as a dominating source of revenue, but Caesars still makes most of its money at slot machines and table games.

After deducting promotional allowances, 63 % of Caesars' us$ 8.8 billion in revenue last year came from gambling.

MGM Resorts International made a similar move in 2009, during a time it became clear that new projects in the casino industry in the United States would be nearly impossible to fund and too expensive. Licensing and management contracts let companies expand their reach without spending capital on facilities.

MGM Resorts has announced more than a dozen deals in various countries to build hotels under its Bellagio, MGM Grand and Skylofts brands, including a 480-room MGM Grand in New Delhi announced in February.

As part of its plan, Caesars announced in March it would partner with restaurateur Nobu Matsuhisa to develop a Nobu hotel and restaurant at Caesars Palace in Las Vegas. Caesars also plans to develop boutiques and standalone brands on Caesars Entertainment-owned real estate in Las Vegas and Atlantic City.

Caesars said Alexander Mirza, a vice president and executive associate to Loveman, would lead the new unit. Mirza told The Associated Press that the company is hoping to help develop 25 hotels in the next five years under Caesars, possibly the Flamingo and other names. Final deals have not been announced.

"We really want to focus on luxury and lifestyle, and even Flamingo, we think, could be a five-star brand in Asia," Mirza said. "We definitely think those brands have potential." He said he expects the company's lifestyle offerings to be expanded into major cities in North America, including the United States.

Caesars owns or manages casinos in 12 states and five countries outside the U.S.