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; Shreveport; and Lake Tahoe, Nev.
And it could remove a major potential obstacle to the ongoing merger of Caesars Entertainment and Eldorado Resorts.
Lincoln, R.I.-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.
"It reaffirms our commitment to employees, customers and the communities in which we operate that Twin River will be stronger than ever," said Soo Kim, chairman of the company's board of directors.
The purchase of Bally's should also remove a potential stumbling block to the $17.3 billion merger of Caesars 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."
"These are fire-sale prices," said Barry Jonas, an analyst with SunTrust Robinson Humphrey. "The whole point of this is to get the Caesars deal over the finish line."
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' chief executive officer. "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.
Opened in 1979, Bally's is one of the oldest casinos in New Jersey. The property has more than 1,200 hotel rooms and 127,000 square feet of gambling space.
Eldorado shares rose as much as 14.4% to $17.82 in New York. Caesars rose 10% to $8.87.
Information for this article was contributed by Wayne Parry of The Associated Press and by Christopher Palmeri of Bloomberg News.
Business on 04/25/2020