Eldorado Resorts, Caesars Entertainment Complete Merger

Eldorado Resorts, Caesars Entertainment Complete Merger

Once a small, family-owned casino company based in Reno, Nevada, Eldorado Resorts is now the largest U.S. casino company.

After receiving approvals from the final three states over the past 10 days, Eldorado Resorts on Monday closed its $17.3 billion deal for Caesars Entertainment. The combined company will operate under the Caesars Entertainment brand and have more than 50 U.S. casinos in 16 states.

“We are pleased to have completed this transformative merger, thus making us the premier leader in gaming and hospitality,” Caesars CEO Tom Reeg said in a statement. “We look forward to executing on the numerous opportunities ahead to create value for all stakeholders.

“Additionally, we are pleased to welcome all of our team members to the combined company, and we look forward to implementing all of the strategic initiatives that will position the company for continued growth.”

Eldorado will hold 56% of the company and will trade publicly on Nasdaq under CZR. In addition to the 52 U.S. casino properties, the combined company has properties in Canada and overseas in Dubai, Great Britain and South Africa, among other venues.

The new company owns eight properties on the Las Vegas Strip, including Caesars Palace, Flamingo and Harrah’s. They are the first Las Vegas casinos Eldorado has owned.

Caesars Rewards will now become the largest loyalty program with more than 60 million members, according to the news release. Eldorado rewards members, as well as future members, will fall under Caesars Rewards.

Details Of The Merger

The merger was announced on June 24, 2019, with Reeg, then-Eldorado CEO, saying at the time that “the combined entity will serve customers in essentially every major U.S. gaming market and will marry best-of-breed practices from both entities to ensure high levels of customer satisfaction and significant shareholder returns.”

Eldorado paid $7.2 billion in cash and around $77 million in stock shares, while taking on Caesars' outstanding debt of about $9 billion. Eldorado acquired outstanding shares of Caesars for $12.75 per share, consisting of $8.40 per share in cash consideration and 0.0899 shares in Eldorado common stock.

Eldorado Resorts and Caesars Entertainment shareholders overwhelmingly approved the acquisition in November.

The Federal Trade Commission approved the merger between casino giants on June 26 after Eldorado agreed to sell two of its casinos. That left state regulators in Nevada, Indiana and New Jersey to give their approvals.

Nevada & Indiana Give Their OK

The Nevada Gaming Control Board and Nevada Gaming Commission gave their approvals to the deal on July 8. Nevada regulators also approved William Hill taking over operations of Caesars sportsbooks. William Hill, the sportsbook provider for Eldorado, currently has 113 sportsbooks in Nevada.

On July 10, the Indiana Gaming Commission unanimously approved the merger. But regulators put in requirements that three of the company’s Indiana casinos needed to be sold in six months and Caesars must keep the current staffing levels and the remaining properties for three years.

On July 13, the Indiana Horse Racing Commission also voted unanimously to approve the merger. The horse racing licenses of Harrah's Hoosier Park and Indiana Grand will be transferred from Caesars to Eldorado Resorts, according to the Indianapolis Star.

The Final Hurdle: New Jersey

The only remaining approval needed for the deal was from New Jersey. And it wasn’t easy as the process took three days before the New Jersey Casino Control Commission gave its blessing on Friday.

There were concerns from the commission about the merger’s implications for Atlantic City casinos, according to The Press of Atlantic City. But the commission voted Friday to approve the deal, despite the new Caesars owning four of the city’s nine casinos.

“Atlantic City is going to be a significant piece of this combined company,” Reeg said during testimony July 15, according to the Associated Press. Reeg and other Eldorado executives appeared before the commission that day.

New Jersey’s approval led to Monday’s announcement that the merger was complete.