Gaming board backs Eldorado-Caesars deal

Gaming board backs Eldorado-Caesars deal

The Nevada Gaming Commission on Wednesday unanimously approved Reno-based Eldorado Resorts Inc.’s $17.3 billion bid to acquire Caesars Entertainment Corp. and build the world’s largest casino operation.

With Nevada’s approval, the deal now needs final approvals in Indiana and New Jersey for it to go forward.

After a three-hour hearing by the Gaming Control Board in which board members unanimously recommended approval of the deal, commissioners had fewer questions having heard all the earlier testimony.

Eldorado executives steered through a wide variety of potential issues, including weathering a heavy debt load, building the company’s diversity program, navigating operations through the coronavirus pandemic and continuing to divest properties to comply with Federal Trade Commission requirements.

Chairwoman Sandra Morgan and member Philip Katsaros participated in the Sawyer Building hearing room in Las Vegas where seats were widely separated and all participants wore masks except when socially distanced. Member Terry Johnson participated remotely.

There are still two other states that need to weigh in before the deal — the largest in history for the gaming industry — can be completed.

Eldorado management would control the company, which is bidding to create the world’s largest casino operation.

The three-member Control Board is expected to pick through the deal’s finances, first announced June 25, 2019, and offer an affirmative recommendation for the commission to consider immediately after the Control Board acts.

The five-member commission is down a member because Gov. Steve Sisolak has yet to appoint a replacement for former Chairman Tony Alamo, who stepped down in April so that he could spend more time with his day job as a health care professional.

Regulators from both boards are well familiar with Eldorado and Caesars executives. Going into the deal, Eldorado had 23 properties in 11 states with 23,900 slot machines, 660 table games and 11,300 hotel rooms. Caesars had 53 properties in 14 states with 38,000 slot machines, 2,700 table games and 36,000 hotel rooms.

The FTC conditionally approved the deal June 26.

One of the conditions imposed by the FTC in its approval of the deal was for Eldorado to divest casino properties in South Lake Tahoe, Louisiana and Kansas City, Missouri. Eldorado already has moved on deals, including selling the Mont Bleu Casino Resort Spa and the Eldorado Shreveport Casino Resort to Rhode Island-based Twin River Worldwide Holding Inc., in April for a total of $155 million.

The FTC said Eldorado is selling its Isle of Capri casino in Kansas City. Under the proposed settlement, if the Isle of Capri sale is not complete within 60 days after the proposed acquisition of Caesars closes, the commission may, at its discretion, require Eldorado to divest the casino to a commission-approved buyer within 12 months.

One of the five FTC commissioners, Rohit Chopra, opposed the deal, calling on the other casinos to be divested before commission authorization.

When the deal was first announced, Eldorado was pricing its shares at $12.75 each and of that, Eldorado would pay $8.40 per share in cash with the rest of the payment made in the form of stock in Eldorado.

Since June 2019, Eldorado shares have been on a wild ride. They hit a 52-week low of $6.02 a share on March 18 — the day Sisolak closed the state’s casinos for what would be 78 days. Stock is now north of $38 a share.

Eldorado CEO Thomas Reeg said there’s no reason to renegotiate terms of the deal, even though “ticking fees” of $2.3 million a day that began April 1 because the transaction wasn’t completed by that predetermined deadline are now making the transaction even sweeter for Caesars shareholders.

Assuming the commission signs off on the deal, there are still two more regulatory bodies that must act for it to be done. The Indiana Gaming Commission is scheduled to meet Friday while the New Jersey Casino Control Commission is scheduled July 15.

Indiana has been less than enthusiastic about Eldorado’s treatment of its other horse tracks around the country and the issue could arise when that commission meets.

This is a developing story. Check back for updates.

Contact Richard N. Velotta at [email protected] or 702-477-3893. Follow @RickVelotta on Twitter.

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