Caesars Says Bye-Bye to Belle of Baton Rouge, Property Reeg Once Wouldn’t Stay At

Posted on: December 1, 2020, 03:00h. 

Last updated on: December 1, 2020, 03:09h.

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

Caesars Entertainment (NASDAQ:CZR) continues divesting assets, with the company saying today it’s selling the Belle of Baton Rouge riverboat casino to CQ Holding Company, also known by the Casino Queen brand.

Belle of Baton Rouge
The Belle of Baton Rouge riverboat casino. Caesars is selling the venue for an undisclosed sum. (Image: Baton Rouge Business Report)

Financial terms of the deal weren’t disclosed. Caesars owns the operating rights to the venue, while Gaming & Leisure Properties (GLPI) owns the property.

Pursuant to the terms of the amended lease agreement with Gaming and Leisure Properties, Baton Rouge will be removed from the GLPI Master Lease, and the rent payments to GLPI will remain unchanged. GLPI will retain ownership of the real estate of Belle of Baton Rouge,” according to a statement.

Caesars said it expects the transaction will close in the middle of 2021.

Infamous Property

The Belle of Baton Rouge is one of 15 riverboat casinos in the Pelican State and it rose to some infamy early this year.

The venue was operated by Eldorado Resorts, the company that acquired Caesars for $17.3 billion. When then-Eldorado and now Caesars CEO Tom Reeg made a January appearance before the Louisiana Gaming Control Board (LGCB) to discuss the takeover, he ‘fessed up to the Belle being so rundown and in need of enhancements that he stayed at the nearby L’Auberge Casino & Hotel, which is run by rival Penn National Gaming.

“The fact that I stayed at L’Auberge last night is a comment on our view of the state of the Belle as it sits today,” said Reeg.

At that meeting, the chief executive pledged to LGCB that Caesars would spend $500 million over the next four years refurbishing the company’s Pelican State venues. It’s not clear what Casino Queen’s enhancement plans are for the Belle of Baton Rouge or if Caesars’ Louisiana expenditures will be altered upon selling that venue.

Reducing Louisiana Exposure

When Eldorado revealed its takeover offer for Caesars in June 2019, analysts widely speculated that Louisiana would be fertile territory for divestments as the buyer sought to raise cash and reduce operating expenses.

That speculation is proving accurate, as “new Caesars” is in the process of selling Eldorado Resort and Casino in Shreveport and Harrah’s Louisiana Downs, in addition to Belle of Baton Rouge.

When those sales wrap up, Caesars will control three Louisiana gaming venues — two riverboats and Harrah’s New Orleans, which is the state’s only land-based commercial casino, for now.

The state is the fifth-largest gaming market in the US, and an important area for several operators at a time of steadiness for regional casinos and sluggishness in Las Vegas. Last month, Louisiana voters overwhelmingly approved sports wagering, something Caesars is positioned to capitalize on, because even with the pending transactions, it will remain one of the largest operators in the state.