Eldorado Resorts shareholders recently approved the $17.3 billion purchase of Caesars Entertainment, expected to close in the first half of 2020 pending regulatory approval. Caesars shareholders also approved the deal; in fact more than 99 percent of the shareholders of each company who voted affirmed the purchase. The arrangement would give Eldorado 60 properties in 16 states.
The proposed deal, announced in June, led to antitrust concerns in Missouri, where the combined company would have owned six of the 13 licensed casinos. Since then, Eldorado has sold three of its five Missouri casinos. Colorado-based Century Casinos purchased Isle of Capri-Cape Girardeau and Lady Luck in Caruthersville and Rhode Island-based Twin River purchased Isle of Capri-Kansas City.
Eldorado CEO Thomas Reeg says the company will likely sell more assets across the country for antitrust reasons. These sales would be “relatively narrow and modest,” he said. He noted, however, Eldorado is “strongly considering” selling one of its Las Vegas Strip properties but not until the Caesars deal closes. The combined companies will own nine Strip properties, including Bally’s, Planet Hollywood, Harrah’s and Caesars Palace.
Reeg says the merger will blend both companies’ strengths: Eldorado’s decentralized operations and Caesar’s presence on the Las Vegas Strip and its rewards program. Reeg added the companies anticipate $500 million in “synergies” in the first year, meaning combining redundant parts of the merging companies, reducing staff and cutting costs. Caesars Chief Executive Officer Tony Rodio said in August he already was reducing corporate costs. Following the merger, he said more “duplicative” positions will be eliminated.
The Missouri Gaming Commission will have to approve Eldorado’s purchase of Isle of Capri-Boonville and Lumiere in St. Louis; Caesars owns Harrah’s North Kansas City.
Eldorado bought Isle of Capri in 2017 for $1.7 billion, gaining its 13 casinos including the properties in Boonville, Kansas City, Cape Girardeau and Caruthersville. Eldorado bought Tropicana Entertainment’s seven casinos from Carl Icahn for $1.85 billion in 2018 including Lumiere Place in St. Louis and the Tropicana Atlantic City in New Jersey.
Isle of Capri-Boonville Director of Marketing Andy Hays said no changes are expected due to the Eldorado-Caesars merger. The property, opened in in 2001, employs 400 people. Officials said the casino is the main reason taxable retail sales in Cooper County have increased by 17 percent since 2000.
Statewide in Missouri, casino admissions have dropped almost 15 percent since 2015, but total adjusted gross revenue rose 3 percent, according to Missouri Gaming Commission data. Boonville admissions have declined 22 percent and revenue has dropped more than 3 percent since 2015. The Isle of Capri-Cape Girardeau casino admissions decreased 24 percent and revenue fell by 2 percent. In Kansas City, admissions at the Isle of Capri casino dropped 29 percent and revenue fell by 14 percent.
On the positive side, Lumiere Place in St. Louis posted an admission increase of 2 percent and revenue has grown by 19 percent since 2015. Harrah’s North Kansas City, which will become an Eldorado property with the Caesar’s deal, has seen revenue increase by 2 percent despite a 10 percent drop in admissions.
Sports betting could benefit Missouri casinos if the state legislature approves it in the upcoming session. Eldorado already is partnering with William Hill to provide sports betting at its casinos in states where it’s legal. Over the last three months, Eldorado launched sportsbooks at six of its casinos in Iowa, Indiana and Mississippi. Reeg said, “Caesars has a plethora of sports partnerships, including league partnerships, team partnerships, ESPN and we see them all fitting together.”
