ATLANTIC CITY, N.J. — A casino company in the smallest state is pulling off one of the biggest deals of the year in the gambling industry, buying casinos in Atlantic City, New Jersey, Shreveport, Louisiana, and Lake Tahoe, Nevada.
And it could remove a major potential obstacle to the ongoing merger of Caesars Entertainment and Eldorado Resorts, the granddaddy of all gambling deals.
Lincoln, Rhode Island-based Twin River Worldwide Holdings announced Friday it is buying Bally’s Atlantic City Hotel & Casino from Caesars Entertainment for $25 million. It also is buying Eldorado Shreveport Resort and Casino and the Mont Bleu Resort Casino & Spa in Lake Tahoe from Eldorado Resorts for a combined $155 million.
The move expands Twin River’s footprint into three additional states. The company currently owns and manages seven casinos: two in Rhode Island, one in Mississippi, one in Delaware, and three casinos and a horse racetrack in Colorado.
“This is a great deal for Twin River, and diversifies our business across eight states,” said Soo Kim, chairman of the company’s board of directors. “It reaffirms our commitment to employees, customers and the communities in which we operate that Twin River will be stronger than ever.”
The purchase of Bally’s should also remove a potential stumbling block to the $17.3 billion merger of Caesars Entertainment and Eldorado, a transaction that still needs the approval of gambling regulators in multiple states.
New Jersey regulators were sure to take a hard look at whether a combined entity involving Caesars, which currently owns three of Atlantic City’s nine casinos, and Eldorado, which owns a fourth, would violate a prohibition on any one company having an “undue economic concentration,” or owning too much of the market.
“It will significantly reduce the level of economic concentration and that will make it a lot easier for the (New Jersey) Casino Control Commission to approve it,” said Daniel Heneghan, a gambling analyst and former longtime spokesman for the commission. “The fact that it is being sold to a new player for the market here will help increase competition. I’m sure the need to get New Jersey approval was a big factor in deciding to sell the property.”
In the Atlantic City deal, Caesars Entertainment and VICI Properties are relinquishing Bally’s in an all-cash deal. VICI will receive $19 million, while Caesars will get $6 million.
The deal is due to close in the fourth quarter of this year.
“We look forward to the reopening of Bally’s Atlantic City as soon as appropriate once the public health emergency related to COVID-19 has passed,” said Tony Rodio, Caesars’ CEO. “We appreciate Twin River’s commitment to this property, which has a great future ahead under its stewardship.”
Caesars Entertainment is retaining two of the most profitable parts of Bally’s: The Book, a sports betting facility and entertainment center that the company spent $8.4 million on just last summer, and the Wild Wild West, an area adjacent to the sportsbook. Those facilities will now become part of Caesars casino, which is next door to Bally’s on the Boardwalk.
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The massive Caesars-Eldorado merger appears to be closer to completion, as a Rhode Island casino operator also gets access to the lucrative but highly competitive Garden State online gambling market.
On Friday, Caesars Entertainment Corporation and the real estate investment trust VICI Properties announced an agreement to sell the Bally’s Atlantic City Hotel & Casino to Twin River Worldwide Holdings for about $25 million in cash. VICI will receive about $19 million, and Caesars gets $6 million.
The deal, which is subject to regulatory approval at both the state and federal levels, apparently was needed in order for New Jersey to move forward with approving the highly complex $17.3 billion Caesars-Eldorado merger that was announced in June 2019. Other states also still need to sign off on it.
Prior to the announcement, Caesars had three of the nine retail Atlantic City casinos, and the merger with Eldorado was going to give Caesars four with the addition of Tropicana Atlantic City.
Separately, Twin River announced Friday that it will also acquire two Eldorado casinos, one in Louisiana and one in Nevada, both states in which Caesars has casinos. Louisiana doesn’t have any legal form of online gambling, while Nevada has online poker and online/mobile sports betting.
Twin River, based in Rhode Island, will get Eldorado Shreveport in Louisiana and the MontBleu Resort Casino in Lake Tahoe, Nev., for $155 million in total.
Twin River is the owner-operator of a pair of casinos in Rhode Island, in addition to one in Mississippi, one in Delaware, and three casinos as well as a horse racetrack that has 13 authorized OTB licenses in Colorado. The Centennial State is expected to begin its legal sports wagering industry on May 1.
It was widely known before the pandemic that online gambling, though slow to be adopted by states, was the future of the U.S. gaming industry. With retail casinos across the country shuttered, it is generally assumed that states are going to take a look at gaming expansion in the post-COVID-19 world.
Though Twin River has greatly bolstered its portfolio of retail properties by adding 3,318 slots machines, 176 gaming tables, and 2,092 hotel rooms combined with its acquisition of the three aforementioned casinos, legal online betting is front and center with its recent business deals.
Twin River already has deals with DraftKings and FanDuel for online/mobile sports betting in Colorado. Online sports gambling isn’t legal in either Mississippi or Delaware, but it is in Rhode Island, though the market there is minuscule thanks to its population.
In a presser, Twin River said that the deal for Bally’s AC includes “the license to build out a [retail]sportsbook and launch online sports betting and [internet casino]gaming.”
Twin River will enter the New Jersey online gambling market late, but revenue is at a record level. In 2019, the state’s online casinos generated more than $480 million in revenue, while the online/mobile sportsbooks won more than $240 million from bettors.
https://www.njonlinegambling.com/caesars-ballys-ac-atlantic-city-casino-sale/