What: Gaming company Caesars Entertainment's (NASDAQ:CZR) stock slumped 22% lower during the month of June, according to S&P Capital IQ data. That pushed its market capitalization below $1 billion after having peaked at $4 billion just 18 months ago.

Shares are now down by 66% in the last 52 weeks.

CZR Chart

CZR data by YCharts

So what: The odds are rising that Caesars may have to file for bankruptcy protection. Its subsidiary, Caesars Entertainment Operating Company, is already going through bankruptcy proceedings and is attempting to reorganize its $18 billion debt load -- and $1.7 billion of annual interest payments -- into a more manageable $8 billion of liabilities producing yearly interest obligations of $450 million.

However, several of that subsidiary's creditors have filed lawsuits seeking to hold the parent company, Caesars Entertainment, immediately responsible for over $750 million in interest. Caesars has filed legal responses to these challenges in hopes of getting them dismissed so that the reorganization of Caesars Entertainment Operating Company can continue. The company said in a press release that it believes the challenges are "without merit."

But there's no guarantee that a bankruptcy judge will agree with Caesars' position that it isn't itself liable for Caesars Entertainment Operating Company's debts. 

Now what: That's why investors can't be completely confident that Caesars will emerge from these legal battles with its business operations intact. In fact, the parent company might be forced to file for bankruptcy protection following an unfavorable court ruling. 

Investors might want to avoid this stock, at least until the fundamental questions around Caesar's liquidity are cleared up. On that score, shareholders will want to circle Oct. 5 on their calendars. That's the targeted start date of the bankruptcy hearing for Caesars' struggling subsidiary.