The proposed $17.3 billion takeover of casino operator Caesars Entertainment Corp. by its smaller rival Eldorado Resorts took a big leap forward on Wednesday as Nevada gaming regulators gave the nod to the mega-deal.
The Federal Trade Commission gave its blessing to the tie-up on June 26 after Eldorado agreed to offload several properties from its portfolio, including ones in Lake Tahoe and Louisiana.
The deal, originally announced in June 2019, will make Eldorado the largest US casino operator by number of properties. Its portfolio will include 55 casino resorts in 16 US states and several other countries.
The combined business will continue operations and will trade under the name Caesars Entertainment Inc., since the Caesars brand is the more popular of the two. Eldorado CEO Tom Reeg will step in as chief of the enlarged casino group.
During a three-hour presentation before the Nevada Gaming Control Board Wednesday, Mr. Reeg said that they should expect them to focus on their domestic operations. His focus once the merger closes will be to boost the performance of Caesars’ properties along the Las Vegas Strip and the rest of the country and to bring Eldorado’s properties into Caesars’ customer loyalty program.
The executive told regulators that what they are good at is “taking existing properties, optimizing their operations, building a responsible capital structure and driving value for all of our stakeholders.”
Buffets Outside Vegas Not Likely to Reopen
Caesars and Eldorado expect to achieve $500 million in annual cost savings as a result of their tie-up. Mr. Reeg said Wednesday that one of the measures they plan to implement in a bid to achieve that goal will be to reconsider the future of buffets at their properties.
Buffets cost the company about $3 million a year per location and probably will not reopen outside of Las Vegas.
Mr. Reeg also noted that about 1,000 employees will be sacked as a result of the mega-merger. Most of them are currently working at Caesars’ corporate office in Las Vegas.
Eldorado officials said during the Wednesday presentation before Nevada regulators that William Hill will be operating sportsbooks at Caesars’ properties after the merger closes. The British bookmaker and Eldorado signed a multi-year and multi-state sports betting deal in the fall of 2018, but the fate of that deal was unclear until Wednesday.
Nevada gambling regulators from the state’s Gaming Control Board and Gaming Commission gave unanimous approval to the planned merger. Gaming Commissioner Steven Cohen said before yesterday’s vote that he believes the deal works. He went on:
To get this deal done, in this economic climate, in this climate of Covid-19. Good for you. Good for the state. Good for gaming in the United States.
The combined business will become one of Nevada’s largest employers. Eldorado executives said Wednesday that plans for the sale of two Indiana casinos and a resort on the Las Vegas Strip post-merger are still in place.
The deal still needs to be blessed by Indiana and New Jersey casino regulators. The Indiana Gaming Commission’s next meeting is scheduled for July 10, while members of its New Jersey counterpart are set to meet July 15.
The Indiana regulator will consider the merger at its upcoming meeting, but the New Jersey Casino Control Commission is yet to release its agenda for next week’s meeting.
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