Eldorado Stock Approaches Highest Levels Since Early March as Nevada Properties Reopen

Posted on: June 4, 2020, 11:18h. 

Last updated on: June 4, 2020, 11:58h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Eldorado Resorts (NASDAQ:ERI) is setting a blistering pace Thursday, acting as one of the leaders in a broader gaming industry rally. It is trading higher by more than eight percent at this writing on news that its five Nevada casinos are again open for business.

Eldorado Leads Gaming Stock Rally
Circus Circus Reno was one of five Nevada casinos reopened by Eldorado today, sending the stock soaring. (Image: Reno Gazette-Journal)

Eldorado’s current roster of Silver State venues are all in Reno or Lake Tahoe, and those properties participated in a broader reopening across the state that commenced today at 12:01 a.m. Those casinos are the Eldorado Resort Casino, Silver Legacy Resort Casino, and Circus Circus Hotel Casino in Reno, MontBleu Resort Casino Spa in Lake Tahoe, and Tropicana Laughlin.

In March, ERI announced the sale of the MontBleu to Maverick Gaming. But that deal was scuttled in April in favor of selling that venue to Twin River Worldwide Holdings (NYSE:TRWH).

Currently, Eldorado doesn’t operate any venues on the Las Vegas Strip, the gaming hub of the US. But that will change when it completes its $17.3 billion takeover of Caesars Entertainment (NASDAQ:CZR), which could happen later this month or next month. Caesars runs eight casinos on the Strip, several of which reopened today.

Stunning Turnaround

Over the past month, gaming companies, particularly those with regional exposure, are seeing their stocks rebound from the March COVID-19 lows in anticipation and confirmation of property reopenings. ERI stock has more than doubled over the past month, and is up more than seven-fold from its March lows.

“With today’s reopenings in Nevada, 16 of Eldorado’s 23 casino entertainment facilities have resumed operations following the suspension of operations in March,” said the company in a statement.

Of Eldorado’s seven properties that are still shuttered, one in Indiana could restart in the middle of this month. Longer waits are expected for gaming venues in Illinois, where ERI operates one property. There’s talk that Colorado, where the company runs two venues in Black Hawk, could permit casinos to welcome guests back before the end of June.

Among the seven still shuttered Eldorado properties, the longest wait is likely to be the Tropicana in Atlantic City, N.J. As Casino.org reported earlier this week, it’s unlikely Garden State lawmakers will approve casino reopenings there before July.

Policies and Procedures

Like other Nevada operators, Eldorado is implementing an array of health and safety measures and social distancing protocols, including limited gaming area occupancy. Those policies were mandated by the Nevada Gaming Control Board (NGCB) in advance of reopenings.

At The Row Reno, where ERI runs the Eldorado Resort Casino, Silver Legacy Resort Casino, and Circus Circus Reno, a phased reopening is underway.

Silver Legacy’s newly upgraded room accommodations will be the first available, beginning June 4. Silver Legacy is located in the center of the action, with easy access to Eldorado Resort Casino and Circus Circus Reno,” according to the operator.

Assuming no other asset sales, the combined ERI/Caesars will be the dominant operator in Northern Nevada, with five venues across Lake Tahoe and Reno.