Eldorado Resorts Takes Control of Tropicana Atlantic City, Fires Entire Online Gaming Team

Posted on: October 5, 2018, 01:00h. 

Last updated on: October 5, 2018, 11:23h.

Just two days after Eldorado Resorts assumed the operations of the Tropicana in Atlantic City, it sacked the entire in-house team manning its New Jersey online casino, according to sources who spoke to Online Poker Report this week.

Eldorado has already started streamlining at “The Trop” in Atlantic City, just days after finalizing its $640 million acquisition of Tropicana Entertainment. But does its firing its internet casino wing mean it’s not interested in online gambling? (Image: Tropicana Entertainment)

According to OPR, the sources said they believed it was a “vote of no interest and/or confidence in online gambling by the Trop’s new owner.”

It’s a surprising revelation if true. Eldorado’s expansion into New Jersey and Pennsylvania had been viewed by many as a strategic move that would enable it capitalize on liberalized online gaming laws in those states.

As part of a complex deal, Eldorado on Monday acquired the operations of seven Tropicana Entertainment properties, including the Atlantic City resort, that had been sold by Carl Icahn’s Icahn Enterprises for $1.21 billion to Casino and Gaming Leisure Properties (GLP). The latter is a real estate investment trust created in 2013 as a spin off from Penn National Gaming.

Tropicana Entertainment this week became a subsidiary of Eldorado, which paid $640 million to acquire its operations and will lease the seven properties from GLP.

William Hill Deal

Online gaming is booming in New Jersey and the Tropicana online casino places a consistent third in the market, with monthly revenues of well over $3 million. But it may be that Eldorado believes the Tropicana’s online casino provider, Gamesys, can run the whole show on its own, without the need for an independent in-house team.

It could also be that Eldorado plans to prioritize sports betting over online casino — it certainly hasn’t rushed to apply for an online casino license for its new property in Pennsylvania, the Lady Luck Nemacolin.

In early September, the company signed a deal with William Hill that will see the bookmaker provide all its sports betting services, online and live, for the next 25 years.

Enhancing Margins

Eldorado chairman and CEO Gary Carano has made no secret of the fact there would be some streamlining once the Tropicana Entertainment deal had been finalized.

 We intend to reduce the initial purchase price multiple of the Tropicana transaction as we implement a range of operating disciplines designed to enhance margins by further improving customer service and the customer experience while focusing on promotion and other spending in all areas of the newly-acquired properties,” he said in an official statement October 1.

“We look forward to welcoming Tropicana’s team members to the Eldorado Resorts family,” he added.

But not all of them. It seems the Tropicana’s online gaming wing has borne the brunt of its “margin-enhancing operating disciplines.”