The ongoing merger between Eldorado Resorts (ERI) and Caesars Entertainment (CZR) is facing a critical week ahead, as both the Nevada Gaming Control Board and the Nevada Gaming Commission will review its details on Wednesday, while on Friday, gaming authorities in Indiana are set to consider the $17.3 billion deal. Gaining the approvals of Nevada and Indiana would leave Eldorado with only one hurdle before completing the deal, the approval from regulators in New Jersey.
Divestment of Casinos
The ERI/CZR merger moved one step closer to completion on June 26, when the Federal Trade Commission (FTC) issued conditional approval for the tie-up of the two casino companies. The federal body considered the deal for each state both casino operators have gaming properties competition-wise and requested the divestment of properties in states where the competition will be distorted after the completion of the merger.
Eldorado Resorts already entered into an agreement with Twin River Holdings for the $155 million combined price sale of Eldorado Shreveport Resort & Casino in Shreveport, Louisiana, and the MontBleu Resort Casino & Spa in Lake Tahoe, markets where the FTC found out competition would be killed.
Furthermore, the commission was determined to ensure competition protection in Missouri and Mississippi also, requesting the sale of Isle of Capri in Kansas City, Missouri and Lady Luck Vicksburg in Vicksburg, Mississippi, to Twin River Holdings, a $230 million deal the Rhode Island-based casino operator announced July 2.
Nevada and Indiana Would not Require Casino Sales
Regarding the situation in Nevada, there will be no divestment of casino properties prior to merger completion, despite all the rumours that Eldorado was strongly considering the sale of several Caesars’ Las Vegas Strip properties, among which the Colosseum at Caesars Palace and Caesars Forum.
Caesars Entertainment divested its Harrah’s property in Reno in January to a real estate development company that announced it would convert the site into a non-gaming mixed-use one. The casino of the venue that closed down in March due to the state-wide order for closure to contain the virus infection spread, would not re-open. Eldorado Resorts operates 3 properties in Reno, Eldorado, Silver Legacy, and Circus Circus, known collectively by the name “The Row”.
In Indiana the deal will not require the sale of casino properties: Caesars currently owns Hoosier Park Racing & Casino in Anderson, Indiana Grand Racing & Casino in Shelbyville, Horseshoe Hammond in Hammond, and Horseshoe Southern Indiana Hotel & Casino in Elizabeth, while Eldorado operates Tropicana in Evansville.
Eldorado officials announced their intent to sell 2 of the 5 properties the combined entity will own in the state after the merger is completed.
Provided that Eldorado is granted the approval from both states’ gaming authorities, there will be only one step left before the mega-merger deal is completed, getting the approval from New Jersey, where regulators are yet to schedule a hearing on the matter.