Bally’s Finalizes Eldorado Shreveport Buy from Caesars, Expands Reach to Seven States
Posted on: December 23, 2020, 09:31h.
Last updated on: December 23, 2020, 10:22h.
Bally’s (NYSE:BALY) put the finishing touches on its $140 million purchase of the Eldorado Resort Casino Shreveport from Caesars Entertainment (NASDAQ:CZR), funding the Louisiana deal with cash on hand and capital from a credit revolver.
That venue is one the company previously known as Eldorado Resorts (ERI) was required by the Federal Trade Commission (FTC) to divest as part of that operator’s effort to acquire the the old version of Caesars for $17.3 billion.
In approving that mega deal, the FTC told ERI to part with gaming venues in the South Lake Tahoe region of Nevada and the Bossier City-Shreveport area of Louisiana. That was to ensure competitive balance in those markets is maintained.
In January, Eldorado said it was selling its eponymous gaming property in Shreveport, La. to Maverick Gaming LLC for $230 million. But that deal collapsed amid the coronavirus pandemic. ERI was then forced to find another buyer that the FTC would deem financially suitable, ultimately striking an agreement with Bally’s predecessor, Twin River Worldwide Holdings. (TRWH).
That transaction was announced in April, when gaming property prices were at rock bottom levels due to COVID-19, allowing TRWH to scoop up the Pelican State venue, Mont Bleu Resort Casino & Spa in Lake Tahoe, and Bally’s on the Atlantic City, NJ Boardwalk for just $180 million combined.
Important Buy for Bally’s
Sealing the Eldorado Shreveport transaction is important to Bally’s for multiple reasons.
First, it moves along the Rhode Island-based company’s geographic diversification efforts, while diversifying its revenue stream and reducing its dependence on its home market. Second, the acquisition gets the operator into the fifth-largest domestic gaming market, one where sports betting was recently legalized.
With the Shreveport deal in the books, Bally’s currently owns and manages 11 casinos across seven states, a horse racetrack, and 13 authorized off track betting licenses in Colorado. When several still-pending purchases are finalized, including the aforementioned MontBleu, the operator will control 14 gaming venues in 10 states.
Eldorado Shreveport will, at some point next year, likely bear the Bally’s name, as the company is in the process of rebranding all of its venues with that mark. Bally’s on the Las Vegas Strip is operated by Caesars and isn’t part of the “new Bally’s” portfolio.
In Bally’s, the old ERI/new Caesars has developed a steady relationship when it comes to off-loading properties,, and it’s a win-win. The seller raises cash or meets regulators’ divestment requests, while the buyer bolsters its geographic depth.
Just days before unveiling its $17.3 billion offer for Caesars in June 2019, ERI announced the sale of gaming properties in Missouri and Mississippi to the company then known as TRWH.
Then came the aforementioned three-casino deal in April, and that was followed by Caesars selling the operational rights to its Tropicana Evansville casino in Indiana to TRWH in October.
Eldorado Shreveport is one of three Pelican State venues Caesars is parting with. The others are the Belle of Baton Rouge riverboat casino and Harrah’s Louisiana Downs.
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