The $17.3 billion merger between Eldorado Resorts and Caesars Entertainment is down to one last approval.
The Indiana Horse Racing Commission on Monday approved Eldorado as the operator of two casinos with racetracks – Harrah’s Hoosier Park Racing & Casino in Anderson, and Indiana Grand Racing & Casino in Shelby – that are currently owned by Caesars.
New Jersey gaming regulators will consider the Eldorado-Caesars deal on Wednesday.
The company agreed to 22 financial and operation conditions laid out by the commission’s executive director after an investigative report expressed concerns that Reno-based Eldorado is not truly interested in becoming a true horse racing partner” with the state, “as evidenced by its lackluster efforts at other racetracks that it owns or has previously owned.”
James Leahy, and outside spokesman for Eldorado, said in an email the company agreed to the 22 conditions set out by the commission. On Friday, the Indiana Gaming Commission approved the Eldorado-Caesars transaction but said three of the five casinos that Eldorado will operate after the merger would have to be sold by Dec. 31.
In addition to the two casino-racetracks, Eldorado, which is the acquiring company and will take on the name, Caesars Entertainment, will also own Horseshoe Hammond and Horseshoe Southern Indiana in Elizabeth. Eldorado currently owns Tropicana Evansville.
Leahy said the racing commission did not require Eldorado to sell any of Indiana racetracks.
The Eldorado-Caesars deal was approved last week by the Nevada gaming regulators.
The transaction will create a regional gaming giant with nearly 60 properties in 16 states. Eldorado’s management will control the merged operation, with CEO Tom Reeg overseeing the combined company.
Reeg told analysts last month the company would sell two of the Indiana casinos and seemed surprised last week when the gaming commission added the third casino to mix. Commissioners were concerned the five casinos would create “undue economic concentration” in Indiana’s gaming industry.
According to the Northwest Indiana Times, the five casinos involved in together generated nearly 60% of the $590.8 million in gaming taxes paid to the state during the 2019 budget year. One commissioner suggested even a 40% market share was too large and brought selling Horseshoe Hammond in Northwest Indiana.
Reeg unsuccessfully asked for more time to complete and casino sales due to the economic impacts of the coronavirus pandemic and the market uncertainty in Northwest Indiana. The area draws from Chicago and Illinois lawmakers are planning to authorize new casinos in Chicago and south suburban Cook County.
According to the Northwest Indiana Times, Reeg told the horse racing commission the company will sell the Hammond Horseshoe, Caesars Southern Indiana, and Tropicana Evansville to fulfill the divestiture mandate.
Casino sales are currently part of the Eldorado-Caesars merger going forward. Eldorado is selling Eldorado Shreveport in Louisiana, and the operations of MontBleu Resort Casino in Lake Tahoe, Nevada to Rhode Island-based Twin River Worldwide Holdings for a combined $155 million. The transaction will satisfy anti-trust concerns in the two markets raised by the Federal Trade Commission when it signed off on the merger last month.
Twin River is also acquiring Bally’s Atlantic City from Caesars for $25 million.
Eldorado also plans to sell one of the eight resorts on the Las Vegas Strip currently owned by Caesars.
In New Jersey, Eldorado operates Tropicana Atlantic City while Caesars operates Caesars Atlantic City, Harrah’s Atlantic City, and currently, Bally’s Atlantic City.
Shares of Eldorado closed at $39 Monday on the Nasdaq, down $1.15 or 2.86%. Caesars shares closed at $12.14, down 9 cents or 0.74%.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
