The $17.3 billion merger between Caesars Entertainment Corp. and Eldorado Resorts Inc. is still dependent on approval from 14 state regulatory agencies and the Federal Trade Commission, including New Jersey.
So far, four state regulatory bodies have approved of the merger, including Pennsylvania, Louisiana, Iowa and Illinois.
The merger will grant Eldorado Resorts control of close to 60 casinos in the country. While no explicit deadline for New Jersey regulators to make an approval decision on the merger decision has been set, gaming operators expect a deal finalization within the first half of 2020.
Dan Heneghan, former public information officer for the Casino Control Commission (now retired) and former casino beat reporter for The Press of Atlantic City, said state gaming regulators are “concerned about economic concentration in the casino industry for many of the same reasons that the (federal) Justice Department is concerned about monopolies in industry in general.”
“If you have a monopoly, or something close to a monopoly, there’s always the concern that the big player can effectively set prices,” Heneghan said.
Back in September, Caesars Entertainment and Eldorado Resorts presented a joint petition to NJ regulators, and stated their intentions of providing an economic analysis that would disprove their merger would cause an undue economic concentration.
New Jersey and Atlantic City Play Major Role in Deal
Since the newly formed company will control nearly half of the resort’s casinos (four out of the nine total casinos), New Jersey and AC will play a major role in the deal. Under its current designations, the company merger will employ 40% of casino industry workers in Atlantic City and represent almost 37% of their total gaming revenue.
Currently, Caesars Entertainment has three outstanding deed restrictions on former casino properties. Those include the former Atlantic Club Casino Hotel, the Claridge Hotel and the Showboat Hotel Atlantic City. These restrictions disallow them to operate as gaming parlors and adds some stress to the current deal.
The Attorney General’s Office, who advised that New Jersey gaming regulators would also be retaining an expert, said this in an email:
“As required by law, the Division is responsible for ensuring the honesty, integrity and financial stability of casino licensees. Part of this process is analyzing the economic impact of casino acquisitions such as the Eldorado / Caesars merger. As part of this process the Division has retained an economic expert to assist with the review of this merger.”
About the Caesars-Eldorado Merger Deal
Eldorado Resorts $17.3 billion acquisition of Caesars Entertainment is slated to become the world’s largest casino operator in terms of gaming assets. To acquire 51% of Caesars, Eldorado will pay $7.2 billion in cash and 77 million shares of stock, as well as taking on Caesars’ existing debt.
Upon regulatory approval, Caesars will merge with Eldorado subsidiary Colt Merger Sub Inc and a new, wholly owned Eldorado subsidiary will exist and operate under the Caesars name.