Eldorado Resorts Inc. moved one step closer to its $17.3 billion acquisition of Caesars Entertainment last Friday. The Indiana Gaming Commission (IGC) gave its seal of approval along with some requirements as well.
Why Does Eldorado Resorts Inc. Multi-Billion Casino Deal Receive Approval in Indiana?
The state’s gaming commissioners added two main conditions to their approval as follows:
- First, Eldorado must have agreements of sale in place for three Indiana casinos by the end of the year.
- Second, the company needs to maintain its employment level in the state at the remaining gaming venues. This period extends for the next three years.
When the deal to buy Caesars does close, the new company would own and operate Horseshoe Hammond, Caesars Southern Indiana and Tropicana Evansville. The IGC also approved the transfer of the Indiana Grand and Harrah’s Hoosier Park racinos as part of the deal. However, those two sales also need approval from the Indiana Racing Commission (IRC).
The rational behind the sale of three properties has to due with gaming capacity. Of the 13 licensed properties, the five in question control almost 50 percent of the slots and table games. Total slots in the state add up to 17,255.
From a revenue standpoint, those five casinos accounted for $113.2 million using this past January’s numbers. Total gaming revenue that month was $189.3 million. This adds up to a 60 percent share.
Eldorado shareholders will own a 56 percent stake in the new company.
This figure was released by the company’s CEO Tom Reeg. He will maintain his position for the new company. The IRC is expected to meet this week to discuss the deal. The final hurdle to closing is approval in New Jersey. That state’s Casino Control Commission is also expected to discuss the matter this week.
Part of Eldorado Resorts’ proposal to the state was the sale of two properties. This would reduce the market share in the state to 40 percent. The figure is also based on moving the casino boats in Gary to dry land. It also includes the construction of a newly approved casino in Terre Haute.
As far as which properties will be sold, it is still contingent on the IRC. If Eldorado receives approval to buy the two racinos, Tropicana Evansville and Caesars Southern Indiana would likely be sold. This was also according to a statement from the CEO.
As the Chicago casino market continues to grow, Horseshoe Hammond becomes a key piece of that market. Mr. Reeg went on to state:
“That’s a very difficult asset to think about selling. And the current environment between the pandemic and the competitive situation, expanding in Illinois. I’m not optimistic about how that would go.”
However, the idea of selling a third property could force the company’s hand. Reeg added that Horseshoe Hammond would probably be sold as well. Given market conditions, one casino could be sold with six months. It may take up to 12 months to sell the other and 18 months to sell the third.