Eldorado Resorts has just made an important move towards becoming a nationwide player, by acquiring Caesars Entertainment.
The latter is well known not only in the United States, but also beyond borders for its online casinos. That’s why many were probably surprised to hear that a smaller and less known company was able to acquire this gambling giant.
Having said this, for Eldorado Resorts this is simply business as usual, after they have previously acquired Isle of Capri Casinos and Tropicana Entertainment.
An important milestone for Eldorado Resorts
The rapid expansion has made Eldorado Resorts an important player in the United States, with a solid foothold in the regional casino industry.
Even though the previous two acquisitions were significant, the takeover of Caesars Entertainment is their greatest achievement so far.
They had to pay a massive amount of $17.3 million, which consists of a mix of cash and Eldorado common shares. Equally important is the fact that the company that initiated the takeover will assume Caesars Entertainment’s outstanding debt.
In the wake of this acquisition, the combined companies will still use the Caesars brand for things such as online roulette games, which is better known nationwide. They have a strong position in Atlantic City, but what made this company so tempting for Eldorado is its iron grip on the Las Vegas gambling market.
By purchasing Caesars Entertainment, Eldorado has also gained access to its portfolio that consists of Caesars Palace, Planet Hollywood, Paris Las Vegas, Harrah’s Las Vegas, Bally’s Las Vegas, the Linq and the Flamingo Las Vegas.
Online gambling is eating away at the profits made by land-based casinos, but Las Vegas remains profitable despite these serious challenges. That’s what made the acquisition so important and the amount spent is likely to pay dividends in the long run.
Eldorado has set an important milestone by adding Las Vegas on the list of Nevada cities where they currently operate. Gamblers can enjoy their services in Reno, Laughlin and Stateline as well as in other American states such as Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, New Jersey and Ohio.
Players are the collateral beneficiaries
Eldorado Resorts obviously regard the acquisition of Caesars Entertainment as a profitable investment that makes the financial commitment worthwhile. Meanwhile, their own players, as well as those who enjoy spending their time gambling at Caesars brands will also benefit from this purchase.
That’s because the two ventures will merge their loyalty programs, so the community will soon exceed 65 million people. They will all benefit from the rewards reserve to the most loyal customers.
There are still a couple of hurdles to overcome, especially the antitrust review that will be initiated by the Federal Trade Commission. Certain measures are needed and some properties will likely be sold and the worst-case scenario is to have whole casinos put on the market.
Eldorado is determined to make this work, so the company is likely to do everything the FTC requires to pass the review.