Reno’s historic Harrah’s hotel-casino is set to be sold for $50 million to Reno City Center LLC, after being a landmark presence in the Northern Nevada city for nearly 83 years. Sources told The Nevada Independent that the sale announcement will be given by the casino’s owner, VICI Properties, and is expected to happen later this week. The buyer plans to get the 940-room hotel-casino closed within the next six months and converted into a non-gaming “business entity” in the future.
John Payne, President and COO of VICI Properties, said this of the sale:
“The sale of Harrah’s Reno demonstrates our ability to continuously work constructively with our tenants to improve our individual businesses. This disposition will allow VICI to optimize the quality of our real estate portfolio and redeploy the proceeds toward other attractive growth opportunities while maintaining the existing financial terms of the Non-CPLV Master Lease with Caesars.”
Possible Motivations Behind the Sale
Currently, Harrah’s Reno is operated by Caesars Entertainment, which leases it from VICI Properties. After Caesars went through bankruptcy in 2017, VICI Properties, a real estate investment trust, formed as a spinoff of Caesars. Most VICI Properties are leased to Caesars.
According to industry analysts, they’re pointing to the in-progress merger between Caesars and Eldorado Resorts, a $17.3 billion transaction, as the driving force behind the sale. Eldorado, who already owns three downtown Reno casinos, known as “The Row”: Circus Circus Reno, Silver Legacy, and its namesake, Eldorado, would form a near downtown monopoly if it added Harrah’s to its roster.
Analysts speculate that Eldorado Resorts has no desire to add a fourth casino, when The Row forms the bulk of casino gaming in downtown Reno, all conveniently located on downtown’s main drag. Harrah’s is located just south of the Eldorado Casino. Additionally, they could run into federal antitrust concerns with one company owning that many gaming properties in the area.
Harrah’s Brief History
Harrah’s Reno first opened on North Center Street and Virginia Street on October 29, 1937. It was originally a small bingo parlor and casino. Founded by William F. “Bill” Harrah, a successful American businessman, Harrah’s Reno was the original casino in Harrah’s chain that now includes 17 casinos in 11 states, with four being in Nevada – Reno, Lake Tahoe, Las Vegas, and Laughlin.
Throughout the years, Harrah acquired other casinos and expanded his flagship resort. In 1969, a 24-story tower was completed. In 1981, Holiday Inn, the then-owners of the property, commissioned a 100-room tower addition. By the time Harrah died in 1978, the company was already one the industry’s largest regional casino operators.
In 2005, the company was apart of the casino industry’s largest merger at the time: The $9 billion acquisition of Caesars Entertainment. Five years later, Harrah’s changed its corporate name to Caesars.
Future Plans for the Property
While the specifics of what the future property will be remain unclear, what’s clear is that it will be converted into a non-gaming business entity. The transaction is subject to the closing of the Eldorado/Caesars combination, regulatory approvals and other customary closing conditions.
Tony Radio, CEO of Caesars Entertainment, said this of the property’s redevelopment and its intended positive future impact on Reno:
“We recognize the long legacy of Harrah’s in Reno, where the brand began 82 years ago and our role in the community. We are pleased the Buyer is committed to the community and supports the redevelopment of this wonderful asset.
We have worked closely with the Buyer to provide a reasonable closure plan that allows our great staff in Reno ample time to secure their next jobs, including priority consideration for relevant openings at our other properties in Nevada, including Lake Tahoe and Las Vegas.”