When Eldorado Resorts’ $17.3 billion merger with Caesars Entertainment closes next year, the Reno-based casino giant will go from having zero tribal gaming management deals to five.
Caesars, through the Harrah’s casino brand, is the largest commercial casino operator of tribal properties in the U.S. The company’s management deals with casinos in California, Arizona and North Carolina are long-standing, some going back almost 25 years.
Hilary Tompkins at the NIGA conference in San Diego, April 2019 – Photo by Howard Stutz/CDC
Eldorado has said it would sell one or two of the Caesars-owned resorts in Las Vegas and several regional casinos in markets that could have federal antitrust issues. In August, Caesars ended its effort to win an integrated resort license in Japan.
But Eldorado has not said much about the tribal gaming contracts, although most observers believe the deals will remain in place.
In the companies’ S-4 registration filing with the Securities and Exchange Commission, several tribal gaming authorities, as well as the National Indian Gaming Commission (NIGC), were noted among nearly two dozen regulatory bodies needing to sign off on the merger.
An investors relations spokesman for Eldorado said the company wouldn’t comment beyond the SEC filing. A Caesars spokeswoman said the company would not comment on the Indian gaming contracts.
Hilary Tompkins, an attorney with Hogan Lovells in Washington D.C., who has specialized in tribal gaming matters, said every management contract “must contain a provision that provides for advance tribal approval of any change in ownership interest” by the operating company.
“NIGC approval would be needed if the tribe and new management company seek any amendments to the management contract,” said Tompkins, who was general counsel for the U.S. Department of Interior under President Barack Obama and counseled former New Mexico Governor Bill Richardson on tribal gaming matters as chief legal advisor.
“In addition, NIGC approval is needed for any assignment of a management contract to a new entity,” Tompkins said. “And of course, per the NIGC regulations, the tribe will conduct background investigations on any new primary management officials and key employees.”
Markets
The Eldorado-Caesars combination currently encompasses 60 properties in 16 states.
Caesars management contracts cover tribal casinos in two of the top five Indian gaming revenue producing states, according to the most recent Casino City Indian Gaming Industry Report from California economist Alan Meister.
In California – the nation’s No. 1 Indian gaming state, with more than $8.4 billion in revenue in 2016 – Caesars operates Harrah’s Southern California, near San Diego, and Harrah’s Northern California, near Sacramento. In Arizona, which ranked No. 5 with $1.9 billion in revenue, the company manages Harrah’s Ak-Chin, outside Phoenix.
Caesars also operates Harrah’s Cherokee Casino Resort and Harrah’s Cherokee Valley River Casino and Hotel in North Carolina for the Eastern Band of Cherokee Indians, the only tribe in the state that offers gaming. North Carolina’s revenue total is included in the report’s “Other States with Indian Gaming,” which combines figures from nine states – $2.03 billion in 2016 – due to data confidentiality.
Little comment from the tribes
Tribal representatives were somewhat reluctant to discuss the Eldorado-Caesars transaction. A spokesman for the Cherokees said there is a “blackout period” involving the merger and declined further comment.
The 1,100-room Harrah’s Cherokee Casino Resort opened in 1997 and is located approximately 50 miles southwest of Asheville, at the entrance to Great Smoky Mountains National Park. The 300-room Harrah’s Valley River opened in 2015 near the city of Murphy, which is a two hour-drive from the Tennessee cities of Knoxville and Chattanooga and downtown Atlanta.
Caesars’ longest-standing contract is with the Ak-Chin Indian Community, having opened Harrah’s Ak-Chin 38 miles south of downtown Phoenix in 1994. The property has undergone numerous expansions and renovations over the years and has a 500-room hotel and a 40,000-square-foot casino.
Representatives of the Ak-Chin tribe could not be reached for comment. However, the Eldorado-Caesars merger will need both state certification and a finding of suitability for key personnel from the Arizona Department of Gaming, the state agency that regulates tribal casinos, horse racing and fighting sports.
The ADG issued Eldorado’s state certification on Sept. 4, Caroline Oppleman, the department’s public information officer, said.
Meanwhile, California’s Rincon Band of Luiseño Indians is comfortable with its 15-year partnership with Caesars. The San Diego County property was originally known as Harrah’s Rincon, but renamed Harrah’s Southern California in 2014.
Rincon Tribal Council Member Steve Stallings said in an email that the governing body doesn’t need to approve the merger with Eldorado “as long as our management agreement is unchanged.”
Stallings said there have been many changes in Harrah’s/Caesars over the years, but the NIGC “only needs to be notified of ownership changes in a timely manner.”
Caesars’ newest Indian casino, the $168 million Harrah’s Northern California in Amador County, opened in April. The casino, 28 miles northeast of Stockton and 32 miles southeast of Sacramento, is owned by the Buena Vista Rancheria Band of Me-Wuk Indians.
A tribal representative couldn’t be reached for comment.
That property, which doesn’t operate a hotel, has 950 slot machines, 20 tables games, a full-service restaurant and three fast-casual dining concepts inside its 71,000 square foot facility. It’s the first of three new resorts coming to the area surrounding California’s capital city and is part of the state’s largest single gaming expansion in a decade.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
