The chips are down for Caesars Entertainment.
The heavily indebted casino chain is facing 2014 interest payments of about $1.9 billion, according to non-public financial reviewed by The Post — but is expected to generate just $1.4 billion in earnings next year before interest, taxes, depreciation and amortization.
The shortfall is made worse as the largest casino chain in the country is planning to lay out $600 million on capital expenditures — some of which will go to build a convention center at its Atlantic City Harrah’s to attract weekday business.
“This isn’t sustainable for more than two years,” said one Caesars investor, who spoke on the condition of anonymity.
Caesars has $1.3 billion in cash on its books, according to the investor, and that is being burned through at a quick pace.
Plus, Caesars owes a $791 million bond payment June 1, 2015. Overall, Caesars has $21 billion in long-term debt.
The chain, owned by Leon Black’s Apollo Global Management and David Bonderman’s TPG Capital, is counting on an aggressive growth strategy — based on more states expanding their casino footprint — to overcome the shortfall.
But those plans were rocked last week when Massachusetts rejected the company’s application to open a casino.
At around the same time, Caesars announced the IRS was investigating it for allegedly allowing foreign gamblers to launder money in its flagship Las Vegas casino.
Caesars was going to run the Massachusetts casino while investing only enough to be a 4 percent equity holder if voters approve the measure next week.
Now, the whole strategy is in question.
Maryland awarded Caesars a license to operate the Horseshoe Baltimore casino, which is under construction, but now it may reconsider before actually issuing the license.
State regulator Stephen Martino said he is “gathering information” on the Massachusetts and Las Vegas events and may take some action.
Caesars is expected to bid on a casino license in New York if Gov. Cuomo’s referendum passes Tuesday, a source said.
“Caesars is basically bankrupt if it cannot profit from state licenses they spent nothing on,” a debt investor said.
A Caesars spokesman said it has contacted regulators in every state in which it operates to tell them of the Massachusetts decision and “the tenor was encouraging.”
TPG and Apollo next year will seek a deal with junior debt-holders in which they will trade much of their equity stake for debt forgiveness, sources said.
The private-equity firms are each committing an additional $300 million to Caesars Growth Partners that is expected to invest money in new casino projects, including newly legalized state Internet gaming sites.
Apollo and TPG declined to comment.