Bally’s Atlantic City May Survive, in Some Form, As Eldorado Resorts Acquires Caesars Entertainment
Posted on: July 18, 2019, 05:00h.
Last updated on: July 17, 2019, 08:01h.
Bally’s in Atlantic City, New Jersey, once the jewel of Boardwalk, may survive after all as Eldorado Resorts moves forward with its $17.3 billion acquisition of Caesars Entertainment, Bally’s owner.
Just days after news of that deal broke last month, it was reported that the stumbling Bally’s could be closed because Eldorado and Caesars combine to control four of Atlantic City’s nine casinos, market share some speculated would draw scrutiny from New Jersey regulators.
In addition to Bally’s, Caesars operates its namesake casino in Atlantic City as well as Harrah’s while Eldorado runs the Tropicana, one of the city’s highest revenue gaming properties.
It is widely known that Eldorado is seeking $500 million in cost reductions as part of the Caesars deal and closing a property would be an easy way to recognize some savings, but some industry observers believe Bally’s Atlantic City can avert closure.
I don’t anticipate any properties closing, but I certainly anticipate properties being put on the market,” said Michael Pollock, managing director of New Jersey-based Spectrum Gaming Group, in an interview with The Press of Atlantic City.
Eldorado has not been shy about selling assets to raise cash for the Caesars transaction. Sine June 17, the Reno-based firm has announced the sale of eight casinos for a combined $3.81 billion. The company’s offer for Caesars was formally announced on June 24.
Options For Bally’s
Bally’s recently spent $11 million to expand its sportsbook, Atlantic City’s biggest, into the Wild West Casino, indicating closure of the property may not be a priority for Eldorado. With gross gaming revenue (GGR) rising in Atlantic City and sports betting taking off in New Jersey, closing properties there may not be appealing for any operator.
Still, Bally’s Atlantic City is viewed by some visitors as a property that lags behind the area’s other casinos, including MGM’s Borgata, Caesars and the Tropicana. Guests described the interior of Bally’s as dated and some believe Caesars has neglected the property over the years.
Bob Ambrose, an industry consultant and professor of casino management at New Jersey’s Fairleigh Dickinson University, told the The Press of Atlantic City another option for Eldorado is to fold Bally’s into Caesars, making the former a hotel-only space.
The Boardwalk has a non-gaming property in the form of the Showboat.
Or Just Leave It Be
Initial chatter swirled about Bally’s fate in Atlantic City due to speculation that New Jersey regulators may want to Eldorado to part with a property there to avoid over saturation, but the state gaming commission has not publicly confirmed it will force the company to sell or close one of its Boardwalk venues.
Nor is it clear what the level of interest would be in Bally’s or what price tag Eldorado would seek for the establishment assuming it decided to sell.
The regional gaming operator would likely want some return on the $11 million sportsbook investment and to fetch a price that would go toward chipping away at the $8.5 billion cash and stock portion of its $17.3 billion offer for Caesars.