Eldorado Gets Regulatory OK for Caesars Tie-Up in Three States

Reno, Nevada-based casino operator Eldorado Resorts has updated the market that at separate meetings over the past week, it secured approvals from regulators in three states in connection with its pending marriage with larger rival Caesars Entertainment Corp.

Eldorado received this week regulatory green light to merge with Caesars from the Louisiana Racing Commission, the Pennsylvania State Horse Racing Commission, and the Illinois Gaming Board.

Following these latest approvals, Eldorado and Caesars will also need to get the nod from regulatory bodies in about ten more states where the two companies run casino and/or horse racetracks.

After several months of discussions, Eldorado and Caesars announced in mid-2019 that they would combine to create a casino behemoth with more than 60 properties in a number of states. When the tie-up is finalized, the combined entity, which will operate under the Caesars name as the more popular one of the two, will be the largest casino operator in the US by number of properties.

The transaction, which is on track to close in the first half of the year, values the combined business at around $17.3 billion, including debt that the group will inherit mainly from Caesars and the complex bankruptcy it exited from in the fall of 2017.

Louisiana Gaming Control Board Approval

News about the regulatory approvals Eldorado obtained this past week follow the endorsement of the Louisiana Gaming Control Board from earlier this month.

Members of the casino regulator voted in favor of the proposed combination of the Reno-based company with its Las Vegas-headquartered rival but reprimanded Eldorado’s management for not doing enough to improve the performance of its Baton Rouge casino.

Since the acquisition of the Belle of Baton Rouge riverboat casino, Eldorado has invested just over $1.1 million into property improvements. According to gaming board members, the lack of investment has caused the venue to underperform.

Eldorado’s CEO Tom Reeg told Louisiana regulators that they plan to spend more than $500 million on improving their casinos in the state, including Harrah’s New Orleans which is currently owned by Caesars.

Mr. Reeg noted that some of the money would be directed towards the Belle of Baton Rouge and that they would seek permission to move the casino onto dry land. Eldorado recently received regulatory approval to move its Isle of Capri Casino Lake Charles on dry land. The company plans to plough about $110 million into the relocation of the gambling venue and its expansion.

As for the pending combination, it should be finalized by mid-2020, as mentioned earlier. It is subject to the receipt of all the required regulatory approvals as well as to other closing conditions.

Both Eldorado and Caesars’ shareholders approved the large-scale deal this past November.

Source: Eldorado Resorts Provides Update on Recent Regulatory Approvals

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