-MADHULIKA(4109026026)

Purchased in 1974 for $50,000 as a small & unprofitable casino operation.

By William.G.Bennett & William N. Pennington.

Rejuvenate Circus :- fresh marketing. Went public with a stock offering in Oct

1983, & experiences rapid growth & high profitability over time.

Business of entertainment. Innovators in the theme-resort concept

popular in casino gaming.

Its areas of operations are Las Vegas, Reno, and Laughlin & Nevada as well as other locations in the U.S. and abroad

It operates 9 properties in Las Vegas, 10 properties in Nevada, 1 in Mississippi & has 50% ownership in other 3.

Circus Circus -Las Vegas:-▪ 69 acres land▪ 3744 hotel rooms.▪ 1,09,000 sq ft casino space.▪ Shopping areas.▪ 2 specialty restaurant.▪ Fast food shops▪ Cocktail lounges.

In 1997 - $126.7 million was invested – remodeling.

In 1998 - $35.2 million.

Luxor – 1993.▪ Egyptian themed hotel – casino complex.▪ 30 story pyramid.▪ Two new 22-story hotel towers.▪ 1,20,000 sq ft casino in hotel atrium.

In 1997 – went major renovations – costing $323.3 million.

In 1998 - $116.5 million.▪ 4425 rooms – renovated casino space.▪ A series of IMAX attractions- 5 theme

restaurants.

Excalibur – 1990.▪ 28-story hotel towers – 4008 rooms.▪ 1,10,000 sq ft casino.▪ 12 restaurants▪ 1000-seat amphitheatre.

In 1997 – underwent renovations - $25.1 million.

The silver city casino & Slota-A-Fun combinedly offer 34,900 sq ft of casino floor.

All circus’s operations do well in city of las Vegas.

In 1997- operational earnings for Luxor & Circus Circus -Las Vegas were off 38% from previous year.

Due to disruption in services because of renovations.

Hotel room occupancy remained above 90% - low room rates.

Circus Circus – Reno:-▪ 1605 hotel rooms – 60,600 sq ft of casino.▪ Video arcades▪ Midway games & circus acts.▪ Cocktail lounges.

Remodeling - $25.6 million. In1987 – The Colorado Belle – 63000 sq ft

casino. In 1983 – The Edgewater – 57000 sq ft casino. Combined, these two properties, contain 2700

rooms & over 1,20,000 sq ft of casino.

In Las Vegas – Mirage Resorts – to build Monte Carlo, a hotel-casino 3002 hotel rooms 90,000 sq.ft. casino.

In Elgin, Illnois, - 50 % partnership - Hyatt Development Corporation in The Great Victoria styled to resemble a Victorian riverboat. 36,000 sq. ft casino space.

50 % partnership with Eldorado Limited in Silver Legacy. 1711 hotel rooms. 85000 sq.ft of casino space.

Strategies:- Aggressive growth strategies. Corporate structure – designed to

enhance the growth. A strong cash position – innovative ideas

– cost control. Competitive Edge - Invested heavily in

renovation of existing properties.

3 new projects:- Mandalay Bay:- $950 million.

43 story hotel – casino with over 3700 rooms – 11 acre aquatic environment.

In Detroit, Michigan, Circus has combined with Atwater Casino Group in a JV to build a $600 million project.

Planning to construct a casino resort along the Mississippi Gulf - $225 million.

In Atlantic city, Circus has entered into agreement with Mirage Resorts to develop a 181-acre site in the Marina district.

In 1997 – Gaming industry captured a large amount of dollars spent in U.S.

Gamblers lost $44.3 billion. Casino gambling accounts for 76% of all

legal gambling expenditures. Las Vegas – largest U.S gaming market –

largest conventional market – more than 1,00,000 hotel rooms.

Las Vegas attracts overnight resort-seeking vacationers.

Atlantic city attracts day trippers.

Revenues(1997)

Income(1997)

Revenues(1996)

Net Income(1996

Starwood/ITT

$6597 $249

Hilton hotels

5316 250 3940 82

Harrah’s Entertainment

1619 99.3 1586 98.9

Mirage resorts

1546 207 1358 206

Circus Circus

1354 89.9 1247 100.7

In Las Vegas, Nevada, gambling operations are subject to regulatory control by the Nevada State Gambling Control Board, the Clark Country Nevada Gaming & Liquor

Licensing Board, and City government regulations.

The laws, regulations & supervisory procedure are based on public policy concerned with prevention of unsuitable persons from having direct or indirect involvement with gaming at any time.

Core Competency is casino gaming. Need to focus its efforts in Las Vegas,

Atlantic City and Mississippi. For years, analysts have questioned the

ability of gaming industry to continue high growth as industry matures.

Circus enterprise faces the risk of maintaining high growth in mature industry.

Increasing competition. Decrease in Net Income.

In 1974- Purchased by Bennet and Penington – Casino gaming.

In 1979 - Circus Circus purchased Slots-A-Fun.

In 1982 – remodeled Circus Circus. In 1983 – went public - 0ffering four million

shares on the New York Stock Exchange. In 1983 - extended the operations in Nevada,

purchasing the Edgewater Hotel and Casino on the Colorado River in Laughlin, Nevada.

In 1984 - purchased the Colorado Belle Casino - $4 million.

In 1985 - expanded the Reno facilities - constructing a 29-story hotel tower, called Circus Skyrise.

In 1990 – opened Excalibur. In 1991 - earned $84.3 million on sales

of nearly $620 million. In 1993 – opened Grand Slam Canyon –

amusement park.

In 1995 - Acquisition of privately held Gold Strike Resorts Inc. - $500 million

In 1999 -  $950 million upscale Mandalay Bay resort opens on the Strip; company changes its name to Mandalay Resort Group.

To become the first of a new generation of casino operators who saw their business not as an offshoot of a slightly shady underworld practice, but as an entertainment franchise designed to attract people of all income levels and all ages.

Circus Circus Enterprises, Inc. is in the business of entertainment, with its core strength in casino gaming.

Provide customers with entertainment that is pure play and fun.

Emphasize quality. Look for innovations to improve

customers' experience. Commit to being a leader. Attract family vacationers with fun for

parents and children. In the initial phase, company used to

focus on “low roller”. Later, it started focusing on “middle

roller”.

Strength :- Strong financial position Innovative product & Marketing Experienced management team. Theme resort concept.

Weakness:- Financial Performance. Ability to compete in the fast changing Las

Vegas market.

Opportunities:- Expansion/Diversification Theme park development. Circus has traditionally attempted to

attract the "low roller”. It has also ability to attract “high roller”.

Threats:- Increasing competition Economic cycle sensitivity.

Political:- Strict governmental regulations pertaining

to the gaming industry. Change in laws, regulations & procedures

could have an adverse effect on any gaming operations.

Economic:- Casino gaming operations provide ½ of total

revenue. Expansion of competition is eroding Circus's

market.

Social:- Ability to attract high roller prospects. Aims more at the middle income gambler &

family oriented vacationers as well as upscale traveler and player.

Technological:- Development of theme resort concept –

new concept. Expansion and diversification available due

to a growing industry

Financial performance:- Circus casinos have the low revenue relative to its competitors.

 Las Vegas focuses on catering to higher-end rollers, while the company has targeted family vacationers. Company has geared all of their casinos

based on the family concept and has remodeled their casinos to fit its customer base.

Circus is facing increased competition from traditional competitors who are imitating some of their business strategies. The latest mergers between ITT

Corporation and Starwood Lodging Trust, has brought great competition to Circus.

Growth in the gambling industry has led to geographical expansion in recent years; as a result Circus has been faced with increased competition.

To remain in the business of entertainment.

To stay one of the innovators. To broaden its market. To increase its market share To focus on free cash flow

Aim more at the middle-income gambler, family-oriented vacationer, and the upscale traveler and player.

Promote theme gambling resort concept. Pursue joint ventures and market analysis

of opportunities Employ growth strategy of acquiring

smaller casinos in other states. Differentiate strategy for high and low

rollers

1997Revenues

1997Income

1996Revenues

1996Net Income

Starwood/ITT

6597 249

Hilton Hotels

5316 250 3940 82

Harrah’s Entertainment

1619 99.3 1586 98.9

Mirage Resorts

1546 207 1358 206

Circus Circus

1354 89.9 1247 100.7

Trump Hotel & Casino Inc

1399 -42.1 976 -4.9

MGM Grand 827 111 804 74.5

Purchased as a small & unprofitable casino operations – 1974 - $50,000.

In 1983 – went public – experienced rapid growth & high profitability.

In between 1993 & 1997 – average return on invested capital was 16.5% & generated over $1 billion in free cash flow.

Marketing: Focus on middle income customer. Offer customers good value for the cost Concentrate marketing on repeat

customers Offer a large array of entertainment for

customers Focus on family tourists in

advertisements

Research and Development: Continuously upgrading building and

equipment – so need to have state-of-the-art equipment

Operations: Realize low profits per square foot of

casino Continuously update facilities Design to entice family visitors Use technology to create atmosphere for

customers

Circus Circus Enterprise describes itself as in the business of entertainment.

Marketing of its product cater to “low rollers”.

Its rules and regulation complies with regulatory control by city government regulations.

The laws, regulations and supervisory procedures of virtually all gaming authorities are based upon public policy concerned primarily with prevention of unfair practices.

The main market of the company , showing growth was Las Vegas, Nevada.

Las Vegas remains the largest U.S gaming market.

It is a destination market for most visitor. It attracts overnight resort seeking

vacationers. Gaming revenues are expected to

continue to grow. Currently, in Atlantic City, Donald

Trump’s gaming empire holds the largest market share(30%).

The next closest in market share are Caesar’s (10.3%), Tropicana and Bally’s (9.2%), and Showboat(9%).

There remains a number of smaller markets located around the U.S, primarily in Mississippi, Louisiana, Illinois, Missouri and Indiana.

Native American casinos continue to be developed on federally controlled Indian land – constitute only a small portion of overall gaming revenues.