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Caesars Entertainment and Eldorado Resorts Merge in $17.3B Deal

Black Money Bag

Caesars Entertainment may have been the biggest name in the US casino industry, but a recent merger with Eldorado Resorts has changed the US offline gaming landscape for good. The two companies on June 14 announced a $17.3 billion deal that would see Eldorado acquire Caesars and its properties around the country.

Eldorado, Caesars Merger

Terms of the Deal

Pages of a Document

According to a press release announcing the agreement, this merger includes more than 60 properties across 16 states, which will now be owned by Eldorado. Prior to this deal, Eldorado managed just 26 total properties, many of which were located in lesser-known gambling states, such as Colorado and Louisiana.

Eldorado (NASDAQ: ERI) will buy all outstanding shares of Caesars (NASDAQ: CZR) for $12.75 apiece, which works out to about $17.3 billion in total. $7.2 billion of this is cash while the remainder will be made up of shares in Eldorado and the assumption of Caesars’ outstanding debts. The new ownership of the firm will consist of a roughly 51%/49% division between existing holders of Eldorado and Caesars shares respectively.

What’s interesting about this is that though Caesars is being acquired by Eldorado, the company will retain the Caesars name and branding: a move that has to do with Caesars being a much more recognizable name than Eldorado. The only real changes will take place in the form of new corporate officers taking the reins.

Though the boards of directors for both Eldorado and Caesars have approved the merger, there are still regulatory approvals from state gaming authorities that are needed for the deal to officially become finalized. Furthermore, the shareholders of both organizations must approve of it too. If all goes as planned, the merger is expected to be finalized some time in the first half of 2020.

[UPDATE: Nov. 21, 2019]

On Friday, Nov. 15, shareholders of both Caesars Entertainment and Eldorado Resorts approved of the proposed merger between the two corporations. Owners of Caesars met in Las Vegas while Eldorado's stakeholders convened in Reno. Of those who voted, more than 99% were in favor of the deal.

Assuming all the regulatory hurdles in various jurisdictions are successfully cleared, the deal is on track to be completed within the projected timeframe of the first half of next year.

[UPDATE: July 21, 2020]

On Friday, July 17, regulators in New Jersey gave their approval to the Caesars/Eldorado merger. This was the final jurisdiction that had to sign off on the deal before it could become official.

On Monday, July 20, the two corporations finalized the paperwork completing the acquisition. Keeping the Caesars name, the new conglomerate is now the largest casino company in the United States.

Reasons for the Combination

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While this may seem like a sad ending for a highly reputable and long-standing company such as Caesars, most are not looking at it that way. Less than five years ago, the company was in dire financial straits and, with the help of Carl Icahn, has since bounced back considerably. The sale is validation for most of the people that helped turn the Caesars brand around.

Carl IcahnCorporate Raider Carl Icahn Was a Major Driving Force Behind the Merger

Anyone at all familiar with Caesars Entertainment will be unsurprised by the merger that has just taken place. The aforementioned Icahn, who is quite outspoken, revealed last February just how much vested interest he had in Caesars. Shortly after he stated that he was the sole owner of at least 10% of the company, he immediately went on to tout the benefits of a sale, especially from the perspective of investors.

According to a filing Icahn made with the Securities and Exchange Commission, he believes that:

“...shareholder value might be best served, and enhanced, by selling the company. We believe that our brand of activism is well-suited to the situation at Caesars, which requires new thought, new leadership and new strategies and have acquired a substantial investment in the Issuer in the belief that it will provide us with significant influence in the company’s future.”

Largest Single Casino Operator in the United States

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No matter which way you flip it, Eldorado is greatly expanding its corporate reach as it will soon welcome household casino brands, such as Harrah’s, Horseshoe, and Bally’s – along with, of course, the iconic Caesars name itself – under its umbrella.

Caesars Brand LogosSome of the Major Brands That Will Transfer Over to Eldorado Once the Deal Is Completed

This means massively popular Las Vegas Strip properties such as Harrah’s Las Vegas and the iconic Caesars Palace will now be owned by the newly merged company. Not all of the casinos are so high-profile, however, as properties such as Hoosier Park and Tropicana Evansville in Indiana will also be scooped up by Eldorado as part of this deal.

Caesars PalaceCaesars Palace on the Las Vegas Strip

Geographically speaking, the merger also takes Eldorado from states along the furthest extremities of the US (Louisiana and New Jersey, for example) to states in the middle of the country, like in Iowa and Indiana. Soon, virtually every state where commercial gambling is legal will have an Eldorado property.

Online Gaming Largely Unaffected

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Although this acquisition may have a small effect in regulated online poker markets where the Caesars brand operates, it’s not really expected to have much impact on the wider global internet gaming market. This is because the vast majority of American casino and poker enthusiasts play at offshore sites that aren’t affiliated with any domestic casino groups like Caesars or Eldorado.

If you’re an online poker fan, then you’re probably better off at a large, international virtual poker destination than any of the tiny, ring-fenced state-licensed operators. Check out our complete rundown of the best USA-friendly online poker rooms for additional information. For other games, don’t neglect to read our list of recommended online casinos that accept American customers. Finally, you can bet on sports over the internet with one of the reputable online bookmakers that transact in the United States.