A $ 17.3 billion purchase created by the world’s largest casino company got final approval on Friday, and New Jersey gambling regulators agreed to allow Nevada-based Eldorado Resorts Inc. to acquire Caesars Entertainment Corp.
It comes after an antitrust analyst had assured the New Jersey Casino Control Commission that the deal affecting four of the nine casino resorts in Atlantic City would not concentrate too much of the local gambling economy in the hands of a business.
“The stakes could not be greater,” said Commissioner Alisa Cooper before joining President James Plousis in voting on the deal.
Plousis said he was satisfied after two days of hearings that Eldorado executives had been “honest about the challenges ahead” and “recognized the importance of Atlantic City to its success.”
Eldorado is expected to close the deal in the coming days, making a leap to a company that started with a casino hotel in Reno, Nevada, in 1973, to the top of the gambling world. It will have 52 properties in 16 US states, including Las Vegas Strip casino resorts like Caesars Palace, Paris Las Vegas, Planet Hollywood, Flamingo, and Linq.
The purchase also affects Caesars’ properties in the United Kingdom, Egypt, Canada and a golf course in the Chinese gambling enclave of Macao.
Billionaire investor Carl Icahn will be the largest single shareholder, with more than 10% of the company combined, Eldorado CEO Thomas Reeg said this week. Icahn acquired a large block of Caesars stock after that company came out of bankruptcy protection in late 2017 and pushed for the sale.
Eldorado plans to buy Caesars shares at $ 12.30 a share, using $ 8.70 in cash and the remainder in Eldorado shares, Reeg told Nevada regulators. Eldorado will own 56% of the merged company, which will continue operations and share trading under the name of Caesars Entertainment Inc.
Eldorado shares were trading at $ 39.01 on Friday, and Caesars Entertainment was at $ 12.39.
Reeg will spearhead what officials have called “new Caesars,” and emphasized the company’s focus on gaming operations in the United States.
Approval in New Jersey was the final obstacle. The Federal Trade Commission accepted the plan on June 26, after Eldorado agreed to satisfy antitrust concerns by selling properties in Kansas City, Missouri; South Lake Tahoe, California; and Shreveport, Louisiana.
An FTC commissioner voted no, citing Eldorado’s projected debt of nearly $ 13 billion and billions in additional obligations to VICI Properties and another real estate investment trust, Gaming and Leisure Properties Inc.
Nevada gambling regulators approved the purchase last week, followed by Indiana casino and horse racing authorities. Eldorado agreed to sell three of its five casinos in Indiana. Executives have also come up with plans to sell at least one Las Vegas Strip property.
Of the four affected casinos in New Jersey, Caesars Entertainment and VICI Properties are selling the Bally’s Atlantic City hotel-casino for $ 25 million to Rhode Island-based Twin River Worldwide Holdings.
Eldorado promises not to close the remaining three properties, Caesars, Harrah’s and Tropicana, for at least five years. It also says it will spend $ 400 million to improve them over the next three years and will reinvest 5% of revenue annually after that.
New Jersey regulators refused to remove deed restrictions that block other owners’ casino developments. A day earlier, they rejected requests from Hard Rock Atlantic City and Ocean Casino Resort to comment to the commission before the vote, saying it was too late in the process.
Antitrust expert Timothy Watts of New York-based Nera Economic Consulting testified in online hearings that the successful merger “would not substantially reduce competition” in the Atlantic City betting market and that Bally’s planned sale will improve it.
Martin Perry, consultant and head of the economics department at the University of Illinois, Urbana-Champaign, noted the consolidation of the industry in Atlantic City in the past 15 years. He did not offer an antitrust conclusion, but said that selling Bally’s was an appropriate regulatory requirement.
He also said that updates to casinos and hotel rooms could help attract customers.
“These properties have to be invested if they are going to be competitive with the other major resorts in the city,” said Perry.
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Ritter reported from Las Vegas.
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This story has been corrected to show that the final agreement did not remove the deed restrictions that block other owners’ casino developments. It also corrects that not all affected Atlantic City properties are on the waterfront.
