Eldorado Wins U.S. Antitrust Approval for Caesars Deal
Eldorado Wins U.S. Antitrust Approval for Caesars Casino Deal
(Bloomberg) -- Eldorado Resorts Inc. won U.S. antitrust approval for its $17 billion bid to purchase Caesars Entertainment Corp., putting the two companies one step closer to completing their merger.
The Federal Trade Commission signed off on the deal after Eldorado agreed to sell two casinos to resolve competition concerns, according to a statement Friday. Eldorado previously announced the sale of those properties -- the Montbleu Resort Casino & Spa in Lake Tahoe, Nevada, and Eldorado Resort Casino in Shreveport, Louisiana -- for $155 million.
The new company, which will do business under the Caesars name, will become the largest operator of casinos in the U.S., with nearly 50 resorts, including its namesake Caesars Palace in Las Vegas.
Regulators in the three remaining states where approvals are still required are expected to take up the issue shortly. Nevada and New Jersey haven’t yet scheduled hearings. The Indiana Gaming Commission will consider the merger at a meeting on July 10.
In addition to the Nevada and Louisiana sales required by the FTC, Eldorado, which is headquartered in Reno, Nevada, had already sold casinos in West Virginia and Missouri, in part to satisfy potential regulatory concerns about market share.
The FTC vote to approve the takeover was 3-1-1, with Commissioner Rohit Chopra dissenting and Commissioner Rebecca Kelly Slaughter not participating. Chopra said the settlement doesn’t do enough to restore competition because the buyer of the Nevada and Louisiana casinos, Twin River Worldwide Holdings, won’t close right away.
“I am concerned that the commission is rolling the dice with this complex settlement that will clearly not lead to an immediate restoration of lost competition,” Chopra said.
The merger, first announced in June 2019, capped a flurry of deal-making in the gambling business. But it faced obstacles, including the coronavirus, which shuttered all of the casinos in the U.S. for nearly three months this year.
Eldorado, led by Chief Executive Officer Tom Reeg, had to hustle to find buyers for the some of the company’s properties. He raised $672 million in a stock offering and negotiated new terms with banks, which loaned the company more than $7 billion to get the deal done.
Reeg, a former bond-fund analyst and manager, is known for wringing profits out of even modest properties. The new company is expected to focus on the fast-growing business of sports betting, while cutting back on the customer incentives that have historically eaten into casino profits.
Eldorado shares fell as much as 6.1% to $36.26 in New York trading Friday, while Caesars was down as much as 1.2%.
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