Twin River Worldwide Holdings expanded its portfolio last week, announcing plans to buy casinos in Atlantic City, New Jersey; Shreveport, Louisiana; and Lake Tahoe, Nevada.
The trio of deals constitutes a major expansion of Twin River, which currently owns and manages seven gaming halls in four states: two in its home state of Rhode Island, one in Mississippi, one in Delaware, and three casinos and a horse racetrack in Colorado.
The sale of casinos owned by Caesars Entertainment and Eldorado Resorts will also facilitate the $17.3 billion Caesars-Eldorado merger. In Atlantic City, the merged entity was looking to divest at least one property to avoid the perception of “undue market concentration,” or owning too many assets in a single jurisdiction.
Caesars currently owns the eponymous Caesars Atlantic City Hotel & Casino; Harrah’s Resort Atlantic City; the Wild Wild West; and the adjoining Bally’s Atlantic City Hotel Casino. Eldorado also owns one property in the market, the popular Tropicana Atlantic City.
One of the five had to go, and the logical choice was 40-year-old Bally’s, an aging Boardwalk property referred to dismissively as “Caesars’ stepchild.” The sellers, Caesars Entertainment and VICI Properties, a real estate investment trust, will get $25 million in an all-cash deal. VICI will receive $19 million, while Caesars $6 million.
The Bally’s sale “will significantly reduce the level of economic concentration and that will make it a lot easier for the (New Jersey) Casino Control Commission to approve it,” said Daniel Heneghan, former spokesman for the commission. “The fact that it is being sold to a new player for the market here will help increase competition. I’m sure the need to get New Jersey approval was a big factor in deciding to sell the property.”
Twin River will also pick up two Eldorado properties: Eldorado Shreveport Resort and Casino in Louisiana, and the Mont Bleu Resort Casino & Spa in Lake Tahoe. The price tag for the two is $155 million.
“This is a great deal for Twin River, and diversifies our business across eight states,” said Soo Kim, chairman of Twin Rivers’ board of directors. “It reaffirms our commitment to employees, customers and the communities in which we operate that Twin River will be stronger than ever.”
Eldorado had previously made a deal with Maverick Gaming to purchase the two properties, but the deal never closed, likely a result of the current challenging economy.
“At this time it is more important for Maverick to nurture and protect their existing assets than it is to expand our asset base” said Eric Persson, owner of Maverick Gaming. “They are great assets, and in a normal environment, we would be very excited to own them.”
Caesars will hang onto Bally’s $8.4 million sportsbook and the Wild Wild West casino, an area adjacent to the sportsbook. Those facilities will now become part of Caesars casino, which is next door to Bally’s on the Boardwalk. Combined, Bally’s and Wild Wild West have 185,000 square feet of gaming space, with nearly 3,300 slot machines and 168 table games.
“We look forward to the reopening of Bally’s Atlantic City as soon as appropriate once the public health emergency related to COVID-19 has passed,” said Tony Rodio, CEO of Caesars Entertainment. “We appreciate Twin River’s commitment to this property, which has a great future ahead under its stewardship.”
According to NJ.com, the sale is unrelated to industry pressures caused by the coronavirus, which led to the layoffs of about 16,000 Atlantic City resort and casino workers.
“The sale of Bally’s Atlantic City is a strategic initiative that Caesars Entertainment had been pursuing long before the onset of the Covid-19 pandemic,” said Noel Stevenson, a spokesperson for Caesars.
If approved by regulators in the respective states, the deals are due to close in the fourth quarter of this year.