Caesars Doling Out $325 Million to Enhance, Rename Harrah’s New Orleans

Posted on: December 8, 2020, 08:59h. 

Last updated on: December 9, 2020, 11:57h.

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

Caesars Entertainment will spend $325 million to shore up Harrah’s New Orleans, and the lone gaming venue in the Crescent City will take the Caesars name.

Harrah's New Orleans
Harrah’s New Orleans. It’s going to take the Caesars name and get a $325 million facelift. (Image: NOLA.com)

The Reno-based company made the announcement Tuesday before the New Orleans Building Corporation. It unveiled plans for a new 340-room hotel tower and external and interior enhancements at a property that Caesars has controlled for more than two decades. Last year, Louisiana lawmakers granted Caesars a 30-year license extension to operate in the Big Easy, and the spending plan is part of that agreement.

As part of the extension agreement, Caesars Entertainment will provide millions in tax revenue to New Orleans and Louisiana while creating 600 construction jobs during development and 500 sustainable and new jobs following the construction phase,” according to a statement issued by the company.

Caesars didn’t say when the property on Canal Street near the French Quarter will shed the Harrah’s name and become Caesars New Orleans. There are currently 17 Harrah’s properties in the company’s portfolio.

Details Mostly Sparse

Caesars also said new dining and hospitality offerings will be included in the New Orleans renovations, and that an unoccupied area of the second floor of the casino will be developed. But other gaming-related details weren’t mentioned. Plans for a sportsbook weren’t mentioned, either, though that’s possible, with Louisiana recently approving sports wagering.

When Eldorado Resorts was courting “old Caesars,” CEO Tom Reeg promised the Louisiana Gaming Control Board (LGCB) the company would spend $500 million through 2024 refurbishing its Pelican State properties. Reeg is now chief executive of “new Caesars,” which is in the process of unloading two of its gaming venues in the state.

Sprucing up its New Orleans venue is a smart move by Caesars. Like Las Vegas, NOLA is considered a destination gaming market, and like Sin City, Louisiana’s biggest metropolitan area is suffering the effects of the coronavirus pandemic. In a typical year, the home of Mardi Gras attracts around 18.50 million visitors. That’s a far cry from the 43 million-plus that come to Las Vegas in a normal year. But New Orleans is one of the most-visited cities in the South.

The real estate of Harrah’s New Orleans is owned by VICI Properties. The landlord acquired that property, Harrah’s Laughlin, and Harrah’s Atlantic City for $3.2 billion as part of Eldorado’s takeover of Caesars.

Busy in the Pelican State

News of the New Orleans name change and capital expenditures extends a busy stretch for Caesars in Louisiana, the fifth-largest US gaming market.

Last week, the operator said it’s selling the Belle of Baton Rouge riverboat casino for an undisclosed sum. In September, the company and VICI agreed to divest Harrah’s Louisiana Downs racino to Rubico Acquisition Corp. for $22 million.

When pending sales close, Caesars will run three casinos in Louisiana.