Another hurdle passed
The planned merger between Eldorado Resorts and Caesars Entertainment got approval by the Indiana Gaming Commission on condition that the combined entity sells three of its casinos in the state by the end of 2020.
Following the commission’s go-ahead on July 10, the Horse Racing Commission unanimously approved this merger during a deal hearing on July 13. Two of the gaming facilities involved also host horse racing activity.
the merger got the green light in Nevada
New Jersey is the third and final state that needs to issue regulatory approval after the merger got the green light in Nevada last week. The New Jersey Casino Control Commission is set to consider the agreement on Wednesday.
Conditions for approval
Indiana Gaming Commission officials introduced the casino-selling condition over concerns that the merged company would have too large a market share. If no casinos were sold, the newly merged company would be the owner of five of the 13 commercial casinos in the state. These properties combined contribute 50-60% of the total casino tax revenue every year in Indiana.
newly merged company would be the owner of five of the 13 commercial casinos in the state
Eldorado currently owns a casino in Evansville, while Caesars is the owner of casinos in Elizabeth, Shelbyville, Anderson, and Hammond. Eldorado CEO Tom Reeg explained to the commission that the likely plan is to sell the casinos in Elizabeth and Evansville. The Hammond casino will also possibly be sold.
Selling other casinos
To meet regulatory approval requirements, Eldorado also has to sell some of its other properties across the US. The sale process was delayed due to the mass uncertainty caused by casinos across the country shutting for some time during the COVID-19 pandemic.
After Maverick Gaming pulled out of a deal to buy the Eldorado Shreveport Resort and Casino in Louisiana and the Montbleu Resort Casino in Nevada, Twin River Worldwide Holdings stepped in. The parties agreed an all-cash deal worth $155m for the two properties. Maverick Gaming had originally agreed to pay $230m for the two casinos.
Twin River is also buying Bally’s Atlantic City Hotel and Casino for $25m from Caesars Entertainment. Eldorado has already agreed to sell the Isle of Capri Casino in Kansas City, Missouri as part of the merger.
Origins of the merger
The planned merger between Caesars and Eldorado was first announced in June 2019. If it goes ahead, it will result in the biggest gaming company in the United States, carrying a valuation of $17.3bn.
Initially, the goal was for the deal to be completed by March 25, 2020. However, this did not come to fruition, and Caesars has been receiving daily ticking fees from Eldorado for each month that passes over the original deadline. If the merger falls through, it will cost Eldorado $836.8m.