Eldorado Resorts CEO Says Several Casino Operators Not Currently on Las Vegas Strip Interested in Caesars Properties
Posted on: August 7, 2019, 07:00h.
Last updated on: August 7, 2019, 12:32h.
Eldorado Resorts CEO Tom Reeg told investors this week during the company’s second quarter conference call that several casino operators not currently invested on the Las Vegas Strip are interested in acquiring a Caesars Entertainment property.
Eldorado has agreed to acquire the larger Caesars for $17.3 billion, a deal that’s expected to close in the first half of 2020. If completed, Reno-based Eldorado, which has specialized in regional casino operations, would immediately become the largest player in the US gaming industry in terms of revenue.
The combined entity would retain the Caesars brand over Eldorado. In the interim, there’s been plenty of speculation that, once aligned, the group would look to sell at least one casino resort on the Las Vegas Strip.
Reeg said in June that “there is more Strip exposure than we need.” This week, he revealed that such a sale isn’t likely until after the acquisition is fully executed.
Eldorado currently operates 26 casinos in a dozen states – but none in Las Vegas. Caesars has 34 properties in 14 states, including nine in Las Vegas. Eight of those are on the Strip.
Stripping Down Candidates
Reeg revealed to shareholders that he’s fielding interest regarding a Las Vegas Strip casino from several companies. But he didn’t divulge any potential suitors.
Here’s what some potential investors have said:
Though Phil Ruffin is invested on the Strip already with his Treasure Island, the billionaire has publicly said he would make a play for a second casino on the main drag, so long as it isn’t controlled by a real estate investment trust (REIT). Caesars REIT is VICI Properties, which owns the physical assets of just two of Caesars’ nine Las Vegas casinos – Caesars Palace and Harrah’s Las Vegas.
That leaves Bally’s, The Cromwell, Flamingo, Linq, Paris, and Planet Hollywood as potential properties Ruffin might be interested in. Caesars also owns the non-Strip resort Rio.
Golden Nugget billionaire Tilman Fertitta is also interested in moving to the Strip and expanding from downtown. He said recently, according to the Houston Chronicle, “100 percent, I’m interested. I’ll try to pick off one or two properties.”
Other casino operators with the wherewithal of buying a Caesars property that aren’t currently invested on the Strip include Boyd Gaming and Rhode Island-based Twin River Worldwide Holdings. And though Penn National owns Tropicana, the regional power player is also a likely candidate.
Turbulent Wall Street Week
Eldorado Resorts missed analyst revenue expectations in the second quarter. Reeg blamed various culprits such as flooding in Missouri and Mississippi, as well as construction disruptions in Colorado and Reno.
As a result, shares of the casino operator fell around 3 percent. The down trading came after a dismal beginning of the week that saw all three major US indexes drop around 3 percent on escalating trade tensions between the US and China.
Reeg says the company is confident its “experience in unlocking value at acquired properties” will make the Caesars acquisition a sound financial investment.
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