Eldorado CEO sees "finish line" for Caesars merger, Maryland approves the deal

The Maryland State Lottery & Gaming Control Agency announced Thursday that it approves Eldorado’s pending acquisition of Caesars Entertainment, becoming the 7th state to do so. The announcement came one day after Eldorado Resorts CEO Tom Reeg said he can “see the finish line” on the pending closure of its merger with Caesars Entertainment Corp.

The $17.3 billion acquisition of Caesars is set to close early in the second quarter, Reeg said, and a Caesars property on the Las Vegas Strip will not go up for sale until after the acquisition. “We are 100 percent focused on getting (the Caesars acquisition) done,” he said. “There is absolutely zero risk on the financing side.”

Reeg said in a Wednesday press release that 2019 was an “extremely active and productive year” for the Reno-based company, as reported by Las Vegas Review-Journal. Last year, Eldorado completed the sale of five assets, resulting in $564 million of total gross proceeds. It agreed to sell three additional assets for a combined $460 million.

The company also opened sports betting operations in Iowa and Indiana in 2019. Reeg said the company is “quite bullish” on sports wagering, and that visitation has increased at every Eldorado property that has added a sportsbook.

All Eldorado sportsbooks are operated by William Hill US. Reeg said that “as it sits today,” the combined company would likely bring Caesars’ sportsbooks under William Hill’s operations. As of September, Caesars Entertainment ran 29 of its own sportsbooks in seven states, including Nevada.

Eldorado took a 20 percent stake in William Hill last year. A 2019 statement from William Hill said the sportsbook operator has exclusive rights to operate sportsbooks at all properties owned or managed by Eldorado in the U.S., including any subsequent acquisitions.

“We can be a national player, likely even a leader, in the (sports wagering) space, given the partnerships, the power of the Caesars brand name, the power of the database, the execution that William Hill brings,” Reeg said.

After the merger closes, Reeg said, guests can expect to see more Eldorado assets fall under Caesars’ Horseshoe or Harrah’s brands. “You should expect us to gravitate toward the Caesars brands,” Reeg said. “That’s obviously a big draw in terms of what was appealing about Caesars as a company.” Reeg added that, even though sale-leasebacks have been picking up across the valley, executives said a pure sale-leaseback is “unlikely” in Eldorado’s portfolio anytime soon.

Regulatory bodies in Mississippi, Missouri, Louisiana, Pennsylvania, Illinois, Iowa and now Maryland already approved the merger. Eldorado and Caesars will need to gain approval from regulatory bodies from all 17 states in which the merged company will operate, including Nevada, before the deal can close. It also will need approval from the Federal Trade Commission.

As for the coronavirus’ impact on the company, executives at both Caesars and Eldorado have said the companies have seen no impact from the spread of COVID-19 so far. Eldorado reported a nearly 12 percent decline net revenue decline for the fourth quarter, to $592.1 million, down from $671.8 million a year earlier. Revenue fell 4.4 percent on a same-store basis.