Eldorado’s Merger with Caesars Gets Go-Ahead in Louisiana

The Louisiana Gaming Control Board endorsed Eldorado Resorts’ $17.3 billion marriage with rival Caesars Entertainment Corp., but the regulator criticized the Reno, Nevada-based company for not doing enough to improve the performance of its Baton Rouge casino.

Eldorado’s management appeared before members of the Louisiana Gaming Control Board on Thursday. Getting regulatory approvals in the state where they operate properties is a mandatory step Caesars and Eldorado need to complete in order to be able to proceed with their merger, which was announced in the summer of 2019 and is expected to close by mid 2020.

Before moving ahead to vote in favor of the proposed tie-up, Ronnie Jones, Chairman of the Louisiana Gaming Control Board, asked Eldorado CEO Tom Reeg if he and his management team were “up to the task to make sure that you spread attention to all the properties in all states in which you operate.”

The gambling regulator further noted that Eldorado’s Belle of Baton Rouge Casino and Hotel has not received much attention over the past several years and the lack of investment into its improvement has caused it to underperform.

Mr. Jones also pointed out that Mr. Reeg and the other Eldorado representatives who attended the Thursday meeting with state regulators stayed at a competitor’s L’Auberge Casino Hotel the previous night and not at the Belle.

Eldorado to Invest $500 Million in Louisiana Property Improvements

Since it acquired its Baton Rouge riverboat casino, Eldorado has only spent about $1.1 million, mostly to update its slot machines and gambling equipment.

Responding to criticism from Louisiana regulators, Eldorado’s CEO said Thursday that they “understand that asset in its current state is not acceptable to the state and is not acceptable to us either” and promised that the next time they appear before the board “that situation will be different.”

Mr. Reeg also noted that Eldorado plans to spend more than $500 million in Louisiana over the next four years, including $325 million on improving Harrah’s New Orleans, a hotel and casino complex currently managed by Caesars, and $110 million on moving Isle of Capri Casino Lake Charles on dry land.

Eldorado also plans to move the Belle of Baton Rouge on dry land. The relocation will involve bringing the riverboat casino into an adjacent atrium that had previously functioned as a cluster of warehouses and later on as a shopping mall.

As mentioned earlier, Eldorado and Caesars expect to finalize their tie-up by mid-2020. The deal is subject to regulatory approvals in multiple states around the US as well as to customary closing conditions.

The Louisiana Gaming Control Board was about the second regulator to vote on the merger and there are about a dozen more that need to back it. Both Caesars and Eldorado shareholders approved the deal in November.

Source: Regulators OK casino merger but question management of Baton Rouge facility

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