Indiana Gaming Commission approves $17.3B Caesars-Eldorado deal

The Indiana Gaming Commission on Friday approved Eldorado Resorts Inc.’s acquisition of Caesars Entertainment Corp.’s four Indiana properties as part of a $17.3 billion merger deal that would create the world’s largest casino operation.

In June 2019, Reno-based Eldorado Resorts announced that it planned to buy Las Vegas-based Caesars Entertainment in a cash-and-stock deal valued at $17.3 billion. Combined with Caesars, Eldorado would own or operate 55 properties in 16 U.S. states and several other countries.

In Indiana, Caesars owns four casino properties: Harrah’s Hoosier Park Racing & Casino in Anderson, Indiana Grand Racing & Casino in Shelbyville, Horseshoe Hammond in northwest Indiana and Horseshoe Southern Indiana Hotel and Casino in Elizabeth (near Louisville).

Eldorado owns one property in Indiana, the Tropicana Evansville.

The Indiana Gaming Commission voted unanimously to approve the transfer with conditions: The merged company must have a signed agreement to divest three Indiana properties by the end of the year and the company must commit to maintaining current staff levels at its casinos for at least three years.

Without the required divestures, the merger would give Eldorado five of 12 casino licenses in Indiana and a market concentration of 50% to 60% of state gaming revenues, presenting an “undo economic concentration” as outlined in state law.

On Friday, Eldorado representatives told the Gaming Commission it would likely divest the Evansville and Elizabeth properties. It could also consider divesting the Hammond property, he said, but that would be more difficult because competition from nearby Illinois casinos make the casino less marketable.

The deal still needs to be approved by the Indiana Horse Racing Commission—which meets Monday—and by regulators in New Jersey on July 15. The deal was approved by Nevada casino regulators Thursday.

According to several gambling and horse racing trade publications, Indiana Horse Racing Commission staff have expressed concerns about the prospects of Eldorado owning racinos in Indiana, based on its track record with Scioto Downs in Columbus, Ohio, another horse racing property it operates.

Under terms of the overall deal, Eldorado will buy Las Vegas-based Caesars stock at $12.30 per share, using $8.70 in cash and the remainder in Eldorado shares, Reeg said. Eldorado will own 56% of the merged company.

The company plans to continue operations and stock trades under the name Caesars Entertainment Inc.

Caesars emerged from bankruptcy protection in late 2017, and turned an Eldorado offer away in 2018. The merger got a boost from billionaire financier Carl Icahn, who acquired a big block of Caesars shares, pushed for company changes and backed hiring Rodio from Icahn’s Tropicana Entertainment, which was sold to Eldorado in 2018.

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