US casino giant Caesars Entertainment announced Thursday in an investor release it entered into a definitive agreement with the Eastern Band of Cherokee Indians (EBCI) for the sale of operations at Caesars Southern Indiana for $250 million.
“The purchase of Caesars Southern Indiana operating company marks the beginning of an exciting new future for the Eastern Band of Cherokee Indians.”Richard Sneed, Principal Chief, Eastern Band of Cherokee Indians
EBCI and VICI Enter into Lease Agreement
Upon completion of the transaction which is subject to customary purchase price adjustments, the tribal operator will enter into a new lease agreement with the real estate owner of the property, Caesars’ real estate investment trust (REIT) VICI Properties, starting with an annual rent of $32.5 million. Consequently, annual lease payments from Caesars towards VICI under the Regional Master Lease agreement will decrease by the same amount.
“We are pleased to build upon our long-standing partnership with Caesars as we look to advance our interests in commercial gaming in the coming years.”Richard Sneed, Principal Chief, Eastern Band of Cherokee Indians
Caesars and EBCI Extend Partnership
As of closing the transaction, the Eastern Band of Cherokee Indians and Caesars will enter into a long-term agreement as an extension to their existing partnership to allow the continued use by the tribal operator of the Caesars brand and Rewards loyalty program at the casino property in Indiana.
“Expanding our relationship with the Eastern Band of Cherokee Indians is an exciting event for Caesars Entertainment. Since our partnership began back in 1996, we have admired their growth and the success of their properties. We look forward to increasing our relationship by extending the Caesars brand and Caesars Rewards loyalty program to them at Caesars Southern Indiana.”Tom Reeg, CEO, Caesars Entertainment
The North Carolina tribe and the casino operator have a long-standing partnership which includes Caesars operating for the tribe the Harrah’s Cherokee Valley River in Murphy and Harrah’s Cherokee in the Smokey Mountains.
Monetizing Caesars Rewards
The transaction which is expected to close in the third quarter of 2021, subject to regulatory approvals and other customary closing conditions, is the first for the tribe outside of North Carolina and marks the first time in which Caesars monetizes its rewards program.
Divesting the operations at the casino comes after the requirement set forth by the Indiana Gaming Control Board (IGCB) in the summer, ahead of the completion of the $17.3 billion merger deal with Eldorado Resorts. The IGBC approved the combination conditioned on the need for the divestment of two properties in the state.
In October, Caesars entered into an agreement for the $480 million sale of Tropicana Evansville to Bally’s Corp and Gaming and Leisure Properties (GLPI) investment trust, and that deal is still to complete next year.