Circus Circus Enterprises, Inc. (1998) Summary Founded in 1974 in Las Vegas, Nevada, Circus Circus Enterprises (CCE) is in the entertainment industry with casino gaming as its core business. Where CCE separates themselves from the other Las Vegas casinos is thorough its emphasis on family theme park entertainment catering to family vacationers and low rollers. CCE has experienced strong cash flow, revenues, and profit margins, though they have been declining in the last few years. Management believes the decline in revenues and margins are directly attributable to increased competition and disruptions caused by renovations to the casinos. CCE has entered into several joint ventures in Nevada and Illinois and is developing joint ventures in Atlantic City and Detroit. The major project CCE has in progress is Mandalay Bay in Las Vegas, which, along with Excalibur and Luxor, will cater to the more upscale customer and high roller.
Situation Analysis CCE derives the majority revenues from its large Las Vegas holdings: Circus Circus-Las Vegas, Excalibur, and Luxor.
These holdings account for approximately two-thirds of the total revenues to the company as well as seventy-five percent of the refurbishment capital expenditures. Las Vegas has over 20 major casinos in predominately two areas, a ten mile stretch of Las Vegas Boulevard known as "the Strip"ÃÂ and a six block area located in the city's downtown business district. All of CCE's Las Vegas holdings are located on the Strip, CCE owns over a square mile of developable land along this valuable location.
Reno, another highly competitive gaming market, has over 13 casinos that compete directly with CCE's two casinos there. In fact, CCE's two casinos directly compete with each other for the same customer base. CCE is experiencing growing competition with its Tunica and smaller Nevada operations which have limited the revenues...