The Las Vegas Strip is likely the most lucrative casino destination in the world. This stretch of road is home to many of the biggest and most lucrative casino-resorts currently operating. With the Eldorado Resorts merging with Caesars Entertainment, many analysts predict a number of Las Vegas Strip casinos will go for sale.
It’s an exciting time for casino operators in this city. Some of the top gaming companies in the US have expressed interest in buying properties here. Let’s look at why these casinos may go for sale, and who are looking to buy them.
Eldorado – Caesars Merge Updates
Just a few weeks ago, we reported on the news that Eldorado Resorts and Caesars Entertainment had agreed to merge. Eldorado paid more than $17 billion to acquire Caesars properties, many of which are located in Las Vegas. It’s one of the largest casino deals ever made in the United States.
The newly merged company, now called Caesars, will be based in Reno, Nevada. Interestingly, it comes just two years after Caesars emerged from Chapter 11 bankruptcy. The deal also came after billionaire Carl Icahn purchased a 16% stake in Caesars Entertainment.
With this merger, the company now operates more than 80 casinos around the United States. A number of these casinos operating inside Atlantic City. There are some in AC’s Gambling Board that feels the merger could result in an almost monopoly-like situation. There’s a meeting scheduled to take place here on the subject.
There are many that feel Caesars will begin to sell a number of it’s Las Vegas Strip casinos. Eldorado CEO Tom Reeg claimed it’s a real possibility in the future.
“I would expect that we would be a seller of a Strip asset, but that decision has not been made,” he said in a recent Las Vegas gaming conference.
Companies Already Interested in Buying Las Vegas Strip Casinos
It’s an extremely exciting time for the Las Vegas casino industry. A number of major players in the gambling industry have already expressed interest in purchasing a property up for grabs. Most notably, Tilman Fertitta.
Fertitta and his company own and operate the Golden Nugget Casinos. The group has a proven track record of success. It would certainly be a major upgrade for this company, as Fertitta does not currently own any casinos located on the Strip.
Union analysts James DeCree, a Union Gaming analyst, feels it’s inevitable for Caesars to sell some of its properties. He claims it’s too early to tell which casinos will be sold, yet at least one is likely to be up for grabs within the next few years.
Not many companies have publicly stated they plan to purchase one Caesars properties. Experts predict that a number of them will in the near future. Boyd Gaming and Penn National Gaming are two of the top options. Even smaller companies could get in the mix.
Advantages of Buying One of Caesars Properties
Buying an already-constructed casino certainly has its advantages. Constructing a new casino-resort from scratch can cost billions. Purchasing a casino that’s already been made costs considerably less and offers the opportunity for a quick cash return.
Of course, buying one of these properties will come with a heavy price tag. DeCree feels this may make it difficult for Caesars to find a buyer.
“You’re looking at peak prices right now in Las Vegas at this point in the economic cycle,” he said.
Caesars is very likely to sell at least one of its Las Vegas Strip casinos. It’s also possible that they sell some of the smaller casinos in Las Vegas located off the Strip, as well. It would be nothing new for Eldorado, which sold three of its smaller properties last month.
The Federal Trade Commission still needs to make an inquiry into the details of this merger. This government body may actually force Caesars to sell a few casinos before the deal can be officially sealed.
A few Las Vegas Strip casinos are almost definitely going for sale in the near future. How long it takes a company to purchase one of these properties is unknown. Stay tuned for more updates over the next few weeks.