Vici Properties Close to Selling Iconic Caesars-Operated Harrah’s Reno, Will Become Non-Gaming Venue

Posted on: January 15, 2020, 08:13h. 

Last updated on: January 15, 2020, 05:20h.

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

UPDATE: Jan. 15, 2020: After the close of US markets Wednesday, Caesars Entertainment and Vici Properties confirmed the sale of Harrah’s Reno to CAI Investments for $50 million. The deal is expected to close in the second half of this year.

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Vici Properties (NYSE:VICI), owner of the real estate assets of Harrah’s Reno, is reportedly close to selling that venue to Reno City Center LLC, which is expected to convert the landholdings into commercial space.

Vici is reportedly shopping Harrah’s Reno, and a deal could be announced this week. (Image: Twitter)

A deal could be formally announced as soon as this week, reports The Nevada Independent. Should a sale come to fruition, it would end a more than eight-decade run for Harrah’s Reno as one of the landmark gaming properties in “The Biggest Little City in the World.” Caesars Entertainment Corp. (NASDAQ:CZR) manages the gaming operations at the venue.

The buyer, Reno City Center LLC, plans to close the 940-room hotel-casino on North Center Street and Virginia Street within six months,” according to the Independent.

The rumored sale of Harrah’s Reno, which opened in 1937, comes as Eldorado Resorts, Inc. (NASDAQ:ERI) is nearing completion of its $17.3 billion takeover of Caesars. That deal could be sealed in the first half of this year, possibly in the current quarter.

A spokesman at an external public relations agency for Eldorado told Casino.org he’s “not in a position to answer questions which should be directed to Caesars.”

Requests for comment to Caesars and Vici by Casino.org weren’t responded to prior to publication of this article. A possible sale price for the Reno gaming property hasn’t been mentioned.

Not Surprising

When Eldorado’s offer for Caesars was revealed last June, analysts immediately identified Louisiana and Northern Nevada as two regions in which the companies would look to sell properties to reduce overlap. Earlier this week, Eldorado announced the sale of its namesake gaming venue in Shreveport, La. to Maverick Gaming for $230 million.

The aforementioned Eldorado representative didn’t say whether that company drove the idea of selling Harrah’s Reno. But it’s unlikely the operator wanted a fourth property in its home market. The firm already operates the Eldorado, Silver Legacy, and Circus Circus in downtown Reno.

Nearby Lake Tahoe has also been highlighted as a potential market for divestments by the combined Eldorado/Caesars, as the companies currently control three gaming properties there. As Casino.org reported in late December, Eldorado’s MontBleu has been mentioned as a candidate for possible sale. Caesars runs Harvey’s Resort and Harrah’s Tahoe in that area.

Could Take A While

In addition to the 940 guestrooms, Harrah’s Reno has 40,000 square feet of gaming space and six restaurants, so converting the building for office use as planned by Reno City Center LLC could take some time.

Additionally, the Nevada Gaming Control Board (NGCB) has an array of policies and procedures that must be adhered to when Silver State casinos are shuttered.

According to Regulation 9, Caesars will have to surrender its gaming license for Harrah’s Reno within 10 days of the property being closed. After that, NGCB must account for and destroy gaming chips and move slot machines off the property.

Reno accounts for about 75 percent of gross gaming revenue (GGR) in Washoe County, which also includes Lake Tahoe and Sparks.