The New Jersey Casino Control Commission approved on Friday the $ 17.3 billion acquisition of Caesars Entertainment Corp. from Eldorado Resorts Inc., the latest regulatory approval required before the deal can be closed.
A gaming industry analyst said earlier in the week that the deal could be closed on Friday, but it could happen early next week.
The New Jersey commission’s approval, in a 2-0 vote, came after more than 10 hours of testimony over three days.
During Thursday’s session, commissioners received a request from Hard Rock Atlantic City and Ocean Casino Resort seeking to intervene with their own testimony about the deal. On Thursday night, commissioners rejected the requests.
On Friday, the resumption of the hearing had an inexplicable delay of 1.5 hours.
New Jersey’s approval completed a series of appearances before regulatory groups in the past month. Eldorado took the acquisition plan to two boards in Indiana, the Indiana Gaming Commission and the Indiana Horse Racing Commission, and the Nevada Gaming Control Board and the Nevada Gaming Commission in the past eight days.
Late last month, the Federal Trade Commission approved the deal. Several other gaming regulatory boards in other states had previously approved the deal.
Final votes of approval came from President James Plousis and Commissioner Alisa Cooper. The New Jersey three-member commission was removed from membership due to the retirement of former Commissioner Sharon Anne Harrington earlier this month.
Economic analysis
In Thursday’s testimony, commissioners asked economists if the deal would give the new company a competitive advantage due to the concentration of casinos in Atlantic City.
That spurred two competitors, Hard Rock Atlantic City and Ocean Casino Resort, to file petitions to intervene.
Eldorado already operated Tropicana Atlantic City and, with the acquisition, would add Caesars Atlantic City and Harrah’s Resort in Atlantic City if the deal is approved. Caesars already announced in April that it plans to sell Bally’s Atlantic City to Rhode Island’s Twin Rivers Holdings LLC for $ 25 million.
Among the 40 conditions that New Jersey regulators require Eldorado for approval, are $ 400 million in investments over three years. You will also be required to deposit $ 125 million in a trust account if the Bally deal does not close on time. The company should not guarantee the closing of the property for five years after the closing of the agreement.
Carlo Santarelli of New York-based Deutsche Bank said in a report to investors earlier this week that he expected the deal to close on Friday or Monday.
And Las Vegas-based Brendan Bussmann says that after that is when the real work begins.
“Shareholders must meet once again to ratify everything,” said Bussmann, director of government affairs for Global Market Advisors LLC.
“Once you sign the paperwork and everything, that’s when the real work begins,” he said. “Now, you need to start merging these two organizations into one from a systems point of view and from an operations point of view. While it has been a long journey to get to where we are today, delayed because of COVID, things can move forward. ”
Eldorado’s way of doing things will be different from Caesars’. While Eldorado has emphasized regulators across the country who prefer to give their local managers the authority to make decisions based on their own market, Caesars was more centralized with many important decisions emanating from Las Vegas.
The Carano de Reno family has been successful, and family members will continue to play the leading executive roles for the corporation.
New Caesars
The new company will be called Caesars Entertainment and the shares of the public company will be listed using the stock symbol CZR on the Nasdaq exchange. The new Caesars will also maintain many of the traditional Caesars brands and use them as needed across the country.
Eldorado will also take over the Caesars Rewards loyalty program and quickly integrate existing Eldorado customers.
At regulatory meetings, Eldorado executives spoke openly about divesting properties to meet conditions imposed by various committees and boards.
A new batch of divestments was ordered in Indiana. The company also said it has the ability to sell other properties, especially if a sale would help raise cash to pay off debt, which does not become a factor until 2024.
Speculation abounds as to whether a current Caesars asset in Las Vegas would go on the market, and Eldorado officials do not say whether a specific property will be sold.
In addition to Caesars Palace, Eldorado will own Harrah’s Las Vegas, The Linq Hotel, Flamingo, Cromwell, Bally’s, Paris Las Vegas, Planet Hollywood, and the Off-Strip River. The company also has the new Caesars Forum convention center that was about to open when the COVID-19 pandemic hit and the meeting and convention industry closed. The High Roller Observation Wheel is also part of the portfolio, and three major retail centers – The Linq Promenade, Miracle Mile Shops in Planet Hollywood and The Forum Shops in Caesars – are tied to the company’s assets.
Caesars Palace is also home to The Colosseum, a 4,100-seat entertainment venue that has housed concert residences for Celine Dion, Elton John, Rod Stewart, Cher, Bette Midler, Shania Twain, and Mariah Carey.
“If I had a dollar for every rumor I heard about a property for sale, it could be very, very rich,” Bussmann said.
Bussmann said that potential buyers are almost as interesting as speculation as to which Eldorado property would separate.
Tribes may be interested
Bussmann said tribal governments that may have generated financial firepower should not be counted in considering buying an asset.
The Seminole tribe in Florida has been successful with their Hard Rock properties, and the Hard Rock brand is going to become a resort in Las Vegas with the transformation of the existing hotel to Virgin Hotels Las Vegas. There is still a Hard Rock presence on the Strip, one of the traditional Hard Rock cafes linked to the Seminoles.
California’s tribal operations may also have the means to enter the market. Bussmann said the San Manuel Mission Indigenous Band fits the profile. The tribe, with a casino in Highland, California, in San Bernardino County, has philanthropic ties to UNLV and is also a sponsor of the Vegas Golden Knights and Las Vegas Raiders.
Contact Richard N. Velotta at [email protected] or 702-477-3893. Follow @RickVelotta on Twitter.
