Eldorado Garners Another Batch of Regulatory Approvals For $17.3 Billion Caesars Takeover

Posted on: January 30, 2020, 03:28h. 

Last updated on: January 30, 2020, 04:55h.

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

Eldorado Resorts, Inc. (NASDAQ:ERI) is aiming to wrap up its $17.3 billion purchase of Caesars Entertainment Corp. (NASDAQ:CZR) in the first half of this year. It took steps toward accomplishing that objective with a new batch of regulatory approvals gained this week.

With three more approvals sewn up, Eldorado is inching closer to finishing the Caesars takeover. (Image: CNN)

Two state horse racing commissions and one gaming control board this week signed off on the transaction, which will create the largest domestic gaming company in terms of number of venues.

The company received approval from the Louisiana Racing Commission, the Pennsylvania State Horse Racing Commission, and the Illinois Gaming Board in connection with its pending acquisition of Caesars Entertainment Corporation, subject to customary conditions,” said the Reno-based operator in a statement.

The Louisiana Gaming Control Board (LGCB) approved the acquisition earlier this month. Permission from the state’s racing commission was necessary because, as part of the purchase, Eldorado is getting Harrah’s Louisiana Downs.

More Details

The Pennsylvania State Horse Racing Commission is a different agency from the Pennsylvania Gaming Control Board (PGCB). Eldorado likely needed approval from the former because of the sports betting operations at Caesars’ Harrah’s Philadelphia property and online sports wagering in the Keystone State.

The PGCB is likely to sign-off on the deal because ERI currently doesn’t have a footprint in the state and Harrah’s Philadelphia is Caesars’ lone venue there, meaning concentration risk via the combination is non-existent.

As for the Illinois Gaming Board (IGB) clearance, that’s perhaps the most significant of three mentioned here because it’s a full approval in a large state that’s undergoing significant gaming expansion.

Eldorado runs the Grand Victoria riverboat casino in Elgin, Ill. while Caesars has two Harrah’s properties in the Prairie State – one in Joliet and the Metropolis riverboat.

Speaking of the Midwest, Iowa regulators are expected to consider the ERI/Caesars marriage next week. The companies operate a total of four Hawkeye State properties under the Isle of Capri, Harrah’s and Horseshoe brands.

The Big One Still Looms

With the IGB approval in the bag, ERI still needs permission from another 15 states to finalize the Caesars takeover. While there are concentration concerns in Nevada, regulators there will likely approve the deal because Eldorado could, and Caesars already has, divested a venue in the northern part of the state.

Additionally, it’s widely expected that one or two Caesars Las Vegas Strip venues will be sold when the transaction is completed.

That leaves New Jersey as the elephant in the regulatory room for Eldorado. On the Atlantic City Boardwalk, the company runs the Tropicana, while Caesars manages Bally’s Caesars Palace and Harrah’s.

That’s four of the nine casinos there, and while it’s clear nine is too many, Garden State officials probably don’t want ERI executives to tell them a closure is planned, because that would create a significant amount of displaced workers.