Caesars Buys Out Horseshoe Baltimore Partner, Stake Now 76 Percent

Posted on: August 26, 2021, 04:30h. 

Last updated on: August 26, 2021, 06:24h.

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

Caesars Entertainment (NASDAQ:CZR) is acquiring a minority interest in Horseshoe Baltimore from one of its joint venture partners.

Horseshoe Baltimore
Caesars’ Horseshoe Baltimore. The company is upping its stake in the Maryland venue. (Image: Baltimore Sun)

The Nevada-based gaming giant made the announcement after the close of US markets today. Financial terms of the deal weren’t disclosed.

As a result of this transaction, Caesars now owns 76 percent of Horseshoe Baltimore and will consolidate the results of the property on Caesars’ financial statements,” according to a statement issued by the operator.

Beyond that, details in the statement are scant. In addition to not divulging what it paid for the stake, Caesars doesn’t say from which of its minority partners it acquired the interest. Other members of the ownership include CVPR Gaming Holdings, LLC, Jack Entertainment, STRON-MD Limited Partnership and PRT TWO, LLC.

Interesting Timing for Horseshoe Baltimore Deal

In what’s likely a coincidence, Caesars announced the plan to up its stake in Horseshoe Baltimore seven years to the day that the $442 million venue opened.

Though the company didn’t comment on this point in the sparse statement, it’s possible Caesars is looking to gain more control of the Maryland venue as it angles for a sports wagering license in the state. While launching regulated sports betting prior to the start of the 2021 NFL season next month appears unlikely because of bureaucratic delays that recently emerged, Maryland is still a coveted sports betting market for operators, owing to high disposable income and a devoted fan base.

Other operators have looked to increase Maryland exposure in advance of sports betting launching there. For example, Penn National Gaming (NASDAQ:PENN) acquired the operating rights of the Hollywood Casino Perryville from Gaming and Leisure Properties (GLPI) last December.

Caesars is making clear it intends to be a major player in the booming iGaming and sports betting industries, and it’s possible the increased position in Horseshoe Baltimore meshes with that plan.

Another Possibility

It’s also possible that Caesars is boosting its Horseshoe Baltimore stake to ready a sale of the property assets to VICI Properties (NYSE:VICI). But that’s just speculation at this point.

What isn’t up for debate is that when the company known as Eldorado Resorts announced plans to acquire “old Caesars” in June 2019, it struck various agreements with the real estate firm, one of which is that VICI gets rights of first refusal for a sale-leaseback transaction on Horseshoe Casino Baltimore.

The more of the venue Caesars owns, the greater the economics accrued to the company in a sale of the real estate. The casino operator didn’t say if it’s pursuing 100 percent of the Maryland venue.