Caesars Entertainment fully embraces the notion that “bigger is better.” This has been a widely known fact for some time. So whenever a new Caesars restaurant opens, an existing facility is enhanced, like Bally’s and Harrah’s Atlantic City sportsbooks, or Caesars is in the news for any other reason, it hasn’t been a surprise.
In fact, earlier this year Caesars changed the name of its player rewards program from Total Rewards to Caesars Rewards.
But now even Caesars has outdone itself. On Monday, June 24, both of the corporate giants involved officially confirmed it. The change that’s in the works for Caesars will be by far its biggest and most sweeping yet and has everybody talking. It involves a change in the whole corporate structure. Caesars Entertainment has agreed to merge with Eldorado Resorts.
Eldorado to buy Caesars for $17.3 billion
The Reno-based company Eldorado Resorts is a name already familiar to NJ players since Eldorado took over ownership of Tropicana Casino and Resort in Atlantic City in 2018. Meanwhile, Caesars Entertainment, in addition to its numerous other holdings nationwide, currently owns three Atlantic City casino hotels: Caesars, Bally’s, and Harrah’s Resort.
However, Eldorado Resorts and Caesars have agreed to a new cash and stock deal amounting to $17.3 billion, whereby Eldorado will purchase not just Caesars Atlantic City properties, but all of its US properties. This will result in about 60 properties spanning 16 states operating under the name Caesars.
The stock in the new company will be divided as follows: 51% of the shares will go to Eldorado Resorts shareholders, while the remaining 49% will go to Caesars shareholders. Toom Reeg, current CEO of Eldorado Resorts, and Gary Carano, current Chairman of Eldorado Resorts, will lead the new company.
Assuming the acquisition goes through as planned, Caesars’ presence in Atlantic City will increase from three casinos to four, as Tropicana will also fall under the Caesars umbrella. In addition, Caesars will cement its position as the largest single gambling operator in the US.
What needs to happen for the deal to go through
Obviously, an acquisition of this magnitude was not decided on overnight. On the contrary, it has been months in the making. Investor Carl Icahn played a major role, His huge stake in Caesars Entertainment gave him the power to voice his concerns and push for major changes. Icahn convinced the Board to appoint Tony Rodio, former CEO at Tropicana Atlantic City when Icahn still owned that resort, the new CEO for Caesars Entertainment. He also convinced the Board that the company’s stock was undervalued and that selling it would be in its best interests.
Even so, Icahn does not have the final say. Before the sale can close, both shareholders and state gambling regulators. must approve it. The latter includes the NJ Casino Control Commission, which will weigh in on whether the proposed deal might create “undue economic concentration” in the Atlantic City market and place too much control in the hands of a single operator.
The fact that 44 percent of the Atlantic City casino market would be controlled by one company and 40 percent of all Atlantic City casino employees would work for that one company is certainly something to think about. In any case, assuming the deal does go through, it is not expected to happen before the first half of 2020.
NJ State Senate President Steve Sweeny has concerns
NJ State Senate President Steve Sweeny wasted no time putting these very same concerns on the table. In a statement issued Monday, June 24, he said the following:
“This is a significant purchase that could have a real impact on New Jersey’s gaming industry, Atlantic City’s economy and the livelihoods of casino workers and others whose jobs rely on the financial activity of the gaming sector. At a time when the state’s gaming business and Atlantic City’s casinos are experiencing a strong comeback, we don’t want to allow the ongoing resurgence to be compromised by a deal that concentrates too much control in a national conglomerate.”
“We should be just as concerned about the fate of individual casino workers and their families in Atlantic City as the stockholders are about their profits. The combined company will own 60 casino resorts across 16 states, but we need to look out for the impact on New Jersey.”
Urging the Casino Control Commission to carefully consider the impact the merger would have on Atlantic City, Sweeny also said:
“Gaming regulators should be sure to thoroughly evaluate the consequences of this deal. I will be monitoring the progress of the transaction to make sure it serves the best needs of New Jersey and our workers.”
Federal antitrust laws may also come into play
The federal government may also have something to say on the matter. Reeg has already hinted at the likelihood that the new company would sell some existing Caesars properties on the Vegas Strip to avoid possibly violating federal antitrust laws.
Given that information, one cannot help but wonder if any of the Caesars owned Atlantic City casinos might be next. If so, the players will undoubtedly feel the effects. There are a lot of ifs and a lot of questions waiting to be answered.
The good news: Even more places than before to earn and use Caesars Rewards
If you currently play at any of the Caesars owned casinos in Atlantic City or online or at the Tropicana or Tropicana or Virgin Online Casino, getting the sudden news that Eldorado Resorts is buying Caesars must be disconcerting. Can you still book rooms at the resort like before? Will you keep your earned comps and continue to earn loyalty rewards as before? Will the new company replace the recently debuted enhanced “permanent” sportsbooks at Harrah’s Resort and Bally’s Wild West with William Hill sportsbooks?
What about your online play? So far that hasn’t been mentioned at all.
The good news is that for now, at least, you can relax. All of the benefits you have been enjoying up to now at any of the affected casinos will continue.
After the merger, it’s too soon to say for every area of play, to what extent the policies will change. However, players at Tropicana can probably count on that casino switching its rewards program to Caesars Rewards.
Everyone should find that change a win-win. It will give existing Caesars casino players and Tropicana casino players alike more places to earn and use their rewards both online and offline.
Here at NJ Gambling Websites, we will continue to update you with all the latest developments on the Caesars-Eldorado casino merge.