The massive merger between Eldorado Resorts and Caesars Entertainment has officially been finalized. It took more than a year and an incredible amount of effort. With the deal now done, Eldorado and Caesars have formed the biggest casino company in the US.
This is a historic moment for the US casino industry. Many analysts are now looking at how this merger will affect different states moving forward. We’ll also look at ways this new company plans to deal with the current issues plaguing land-based casinos.
Let’s get into it!
With Final State Approval, Eldorado and Caesars Could Finally Merge
Eldorado Resorts and Caesars Entertainment first announced they planned to merge back in June of 2019. Obviously, this news spread like wildfire. Eldorado agreed to pay $17.3 billion to acquire Caesars; the most expensive purchase in the history of casino companies.
State gambling commissions around the country took notice. Before these two companies could merge, they would need approval from all the commissions they operate in. These government bodies want to ensure the newly-merged company would not result in a monopoly.
Gaining state approval became priority number one. Both Eldorado and Caesars were forced to sell many of their properties in order to get the green light from various commissions. As the months went on, more and more of these commissions approved the merger.
Last month, the FTC finally gave it the go-ahead, as well. This was a crucial step for both companies. Only three more commissions were needed to approve the deal. Eldorado and Caesars arranged meetings with members of these commissions in Las Vegas earlier this month.
First Nevada approved the deal. Not long afterward, Indiana did the same. Late last week, New Jersey’s gaming commission finally gave it a thumbs up, too. With that final approval, this massive deal could finally conclude.
The Biggest Casino Company in the US has Just Been Formed
After more than a year, the massive deal between Eldorado Resorts and Caesars Entertainment has concluded. These companies are now under one banner, making this the biggest casino company in the US. That’s a big statement when considering some of the other casino companies here such as MGM Resorts International and Las Vegas Sands.
Moving forward, the company will keep the Caesars name. It will take control of all 55 properties across many different states. Tom Reeg, CEO of the newly-merged company, has some interesting ideas to immediately boost revenue. Much of his strategy involves cutting down on unnecessary costs.
It’s being reported that most of the company’s properties outside of Las Vegas will remove buffets. These are said to cost an estimated $3 million per year. Ultimately, the juice is not worth the squeeze.
Anthony Carano, COO of the company, also gave some insight on how it plans to make up for its $13 billion debt. He claims most properties outside the US will be sold. It’s possible that several more US casino sales will also take place.
This is a very interesting time for the US casino industry. The biggest casino company in the US has just been formed, yet many gambling venues around the country remain shut down. What are analysts saying about the future of this industry?
Experts Predict More Tough Months Ahead for Casino Companies
The world is in an unprecedented time right now. Never before have entire economies been shut down like they have been over the past few months. The land-based casino industry in the US has been hit particularly hard due to the regulations set in place.
In many states, only Native American casinos are able to operate. These venues sit on sovereign land and do not need to abide by state regulations. Commercial casinos, like the ones found in Las Vegas, can be shut down at a moment’s notice.
Obviously, all US casino companies have been keeping a close eye on new regulations. Some parts of the country are allowing these venues to operate. Others have not yet given the green light for casinos to reopen.
Most analysts predict another tough six months ahead for these casino companies. Even the casinos now reopened are seeing much lower revenue earnings than they did back in January. Some may be forced to close again if rates of Covid-19 don’t begin to decrease.
This obviously isn’t great news for the biggest casino company in the US. Caesars will now be looking to adapt to this market, with an emphasis on online sports betting, in particular. We may see this entire industry evolve as the months go on.
Stay tuned for more US casino news!