Caesars Entertainment Sells Rio Hotel & Casino for $516.3M

On the morning of Monday, Sept. 23, 2019, Caesars Entertainment Corp. (NASDAQ: CZR) made the announcement that it has agreed upon the sale of the Rio All-Suite Hotel & Casino. The casino will pass into the hands of Imperial Companies, following both parties agreeing to a sale price of $516.3 million.

Caesars to Continue Operating Casino for Two Years

While the sale of Rio Casino has been agreed upon, Caesars will continue its operation of the property for at least two more years. The sale of the casino to Imperial Companies (referred to as “Buyer” in transaction paperwork) is expected to be completed by the end of the year with Caesars paying an annual rent of $45 million in order to keep in control of its side of things. After the initial two years, the Buyer has the option of extending the lease under similar terms for a third year, which will see it pay Caesars $7 million.

Additionally, at the end of the lease term, be that the agreed-upon minimum of two years or an extension to three years, Caesars may continue to manage the Rio Casino at the request of the Buyer. Alternatively, there may be a possibility that it provides transitional services to the Buyer instead.

In a press release, the CEO of Caesars Entertainment, Tony Rodio, spoke of the deal allowing his company to focus its resources on the strengthening of its recently renovated holdings on the Las Vegas Strip. These are expected to bring an increased level of Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA).

Tony Rodio, Chief Executive Officer of Caesars Entertainment

Mr. Rodio also said:

The retention of the World Series of Poker and retention of Caesars Rewards customers are all factors that make this a valuable transaction for Caesars.

Details of the Agreement Still Provide Caesars with Control

As Mr. Rodio stated, the agreement that was signed by both parties allows for the Rio to continue being a part of the Caesars Rewards network. Additionally, it allows for co-ownership of guest data that is specific to the Rio. Caesars also has zero restrictions placed on it with regard to any marketing activities during the lease period.

The Rio All-Suite Hotel and Casino, Home of the WSOP...For Now

Guests of the Rio All-Suite Hotel & Casino aren’t expected to see any changes in the overall experience that they have while visiting. In 2020, the Rio will still host the World Series of Poker, and even following this time, hosting rights will remain in the hands of Caesars Entertainment.

The sale of Rio Casino doesn’t come as a huge surprise to some people, considering that rumors around it being passed on elsewhere have been rife for several years. Online poker forums, social media, and news sites have been exchanging stories about its inevitable sale: that it was only to be expected at some point.

Further speculation was brought to a head when Eldorado Resorts purchased Caesars in June for $17.3 billion. At the time, Eldorado’s CEO, Tom Reeg, put forth some outlines for the potential sale of some of the brand’s Las Vegas properties. The Rio Casino is based within Las Vegas, and combining this information with the hearsay that had been circling over the property for multiple years already meant that many people were expecting this to come to pass one way or another.

Seth Palansky Confirms WSOP Status

As noted, the status of the WSOP is not something that poker players will need to worry about. The Vice President of Corporate Communications for Caesars Entertainment, Seth Palansky, sent out a Tweet on Sept. 14, 2019, which read:

Even though the hosting rights to the WSOP will remain in the hands of Caesars Entertainment, the announcement does not provide any information on whether or not the series will stay at the Rio Casino after 2020. This has led some people to speculate that next year’s WSOP series could be the last one to take place within the casino although the general consensus is that the 2021 WSOP will also be held at the Rio.

Gossip surrounding the WSOP relocating from the Rio to elsewhere has been spread around almost as long as the predictions about the casino itself being sold. Of course, now that the sale of the casino has been agreed upon, could the rumors regarding the poker tournament be coming true as well?

If it does turn out to be true that the WSOP is moving, one location that it could end up in is the Caesars Forum Conference Center, which is set to open in the near future.

Projected Rendering of the Finished Caesars Forum

This has been a prime location for people to speculate on, and with an opening currently set for spring of next year, it could mean that the tournament will head there by 2021 or 2022. For now though, this is merely speculation, and nothing has been confirmed.

More on Caesars Entertainment

The Caesars Entertainment brand is known as one of the most diverse casino-entertainment providers in the world. It started out in 1937, first operating out of Reno, Nevada. Since that time, the company has expanded significantly, introducing various new resorts and acquiring multiple companies and locations throughout.

As well as having a plentiful collection of casinos within the United States, Caesars’ portfolio of locations includes the Caesars Entertainment UK collection of casino establishments.

Some of the Brands Contained Under the Caesars Umbrella

Featuring establishments in Las Vegas, Atlantic City, Lake Tahoe, and more within the United States, all of the company’s casino sites come with world-class hotels attached to them. As far as the Rio All-Suite Hotel & Casino is concerned, both sectors of the property are expected to continue operating in their current forms for a minimum of the next two years.

Imperial Companies and Its Background

Imperial Companies, the Buyer of the Rio site, is a real estate brand based in New York City. Led by founding partners Eric Birnbaum and Michael Fascitelli, the company centers its business on real estate investment, development and management. Since its launch in 2014, Imperial Companies has deployed around $1 billion of total capitalization across a variety of investments.

WSOP: Business as Usual

Regardless of the takeover by Imperial Companies, it seems satisfied to allow Caesars Entertainment to continue operating there and, more so, the WSOP. This year’s event ran between July 3 and July 17, and the finish saw Hossein Ensan become $10,000,000 richer with his Main Event win. The event wasn’t without its own pieces of controversy, though, as during the Day 1c part of the tournament, a player chose to drop his pants, expose himself and then launch a shoe at the head of a dealer!

Hossein Ensan Right After His Monumental Win

With it potentially being the last WSOP to be held at the Rio Casino, we can only imagine what the 2020 event will provide to us in terms of thrills and entertainment!

Online Poker Unaffected

Though the change in ownership of the Rio is big news in the live poker community, there's no reason to expect that either the WSOP.com online poker room or any competing sites will be altered to any significant degree. This is especially true of offshore poker providers who tend to have very little connection with the brick-and-mortar casino world anyway.

Whether you're an internet poker veteran or principally a live player who's looking to expand into the online realm, you can learn a lot more about this subject in our guide to online poker for Americans.