Caesars Tussling with Bally’s, Mohegan to Retain Ontario Casino License

Posted on: January 16, 2024, 05:34h. 

Last updated on: January 17, 2024, 04:57h.

Caesars Entertainment (NASDAQ: CZR) has operated its eponymous casino in Windsor, Ontario, since the venue opened three decades ago. However, the company faces competition for those rights for the first time.

Caesars Windsor Ontario Lottery OLG casino operator
Caesars Windsor in Ontario. Bally’s and Mohegan Gaming are attempting to win the license for that venue. (Image: Caesars Windsor)

The Ontario Lottery and Gaming Corp., the regulatory agency that officially owns Caesars Windsor, is reportedly mulling bids for the venue’s operating rights from the incumbent, as well as from Bally’s (NASDAQ: BALY) and Mohegan Gaming & Entertainment, the casino arm of Connecticut’s Mohegan Tribe.

Speaking anonymously, sources with knowledge of the matter told the Globe and Mail that the Ontario Lottery and Gaming Corp. is considering bids from the aforementioned trio to run the Windsor casino. Officials from the regulatory agency and the gaming companies didn’t respond to the newspaper’s request for comments.

The Ontario Lottery and Gaming Corp. may decide on Windsor casino’s operator in the third or fourth quarter. If Caesars is replaced, the new operator would take control of the venue in 2025.

A Potential Loss for Caesars, Ontario

When Eldorado Resorts announced plans to acquire old Caesars in 2019, CEO Tom Reeg, now at the helm of the Caesars, said that international opportunities would have to be “stupendous” for the combined company to consider expansion outside the U.S.

Since then, the Harrah’s operator has halted plans that don’t involve domestic markets. However, Caesars Windsor is a different proposition. It’s close to the U.S. and is a key component in Caesars’ highly profitable managed casino division. That unit runs gaming venues for other owners, including the Ontario Lottery, Gaming Corp., and Native American Tribes.

Additionally, Caesars Windsor is the operator’s best alternative to the commercial casinos in Detroit because the company currently doesn’t have a land-based venue in Michigan.

If the Ontario Lottery and Gaming Corp. decide to change direction, it could be a loss for Windsor and the province. While Bally’s and Mohegan have expansive operations throughout the U.S., and in the latter’s case, beyond, neither can compare to Caesars’ brand recognition. That factor is widely viewed as key in rejuvenating Windsor and luring more visitors to the city.

Even so, there are some interesting factors to consider. In 2018, the Ontario regulator came under fire because it awarded two permits for casinos near Niagara Falls to Mohegan, despite Caesars pledging more capital to enhance those venues.

Why Caesars Should Have Inside Track

If the Ontario regulator jettisons Caesars, it’d cost the new operator almost $60 million to rebrand the Windsor casino. Both Bally’s and Mohegan can afford that. But that doesn’t ensure those operators will enjoy the same success as Caesars.

That’s something regulators must consider because the city of Windsor depends on the casino for 2.5% of its annual budget, according to the Globe and Mail.

On a related note, Caesars’ loyalty program — the industry’s largest — and the operator’s proficiency in iGaming and sports wagering are viewed as assets in the Windsor casino competition. The current scuttlebutt indicates that Caesars remains the leader for the Windsor license.