According to an official announcement, Eldorado Resorts now has Indiana Gaming Commission’s approval regarding the ongoing merger with Caesars Entertainment.
The approval is subject to some terms and conditions. However, it means Eldorado now has the green signal to go ahead with the move.
It now has to wait for approval from two other regulatory bodies, the New Jersey Casino Control Commission and the Indiana Horse Racing Commission, to finalize the big $17.3 billion deal.
There are a lot of eyes on this deal. Once finalized, it will result in the creation of the largest casino operator in the country.
Some Movement in Indiana
Indiana has been in the news due to the growth of online gambling but physical casinos in the state appear to be doing well as well.
Caesars entered negotiations while owning four properties in Indiana namely, Hoosier Park Racing & Casino in Anderson, Horseshoe Hammond in Hammond, Horseshoe Southern Indiana Hotel & Casino in Elizabeth, and Indiana Grand Racing & Casino in Shelbyville.
On the other hand, Eldorado only owns one property in the state, Tropicana in Evansville.
Eldorado intends to only own three of the five names and may sell 2 of these properties once the deal is finalized. According to the deal, Eldorado management will continue to look after the business.
Strip Property Divestment Is an Option
Last week, the Nevada Gaming Commission and the Nevada Gaming Control Board gave their approvals to the Caesars/Eldorado combination.
The two companies own 8 properties in Last Vegas. Rumors suggest that Eldorado might go ahead and divest one of the 8 LA Strip properties within two years of the deal.
Before Nevada, Eldorado received conditional approval from the Federal Trade Commission. The approval is on the condition that Eldorado Resorts divest assets in Shreveport, Louisiana, and Lake Tahoe, Nevada, to balance the market.
Eldorado has already addressed this concern by signing a $155 million deal with Twin River Worldwide Holdings.
In addition to this, the FTC requested Eldorado to sell the Lady Luck Vicksburg in Vicksburg and Isle of Capri in Kansas City within two months of finalizing the deal to keep competition under control in Mississippi and Missouri.
Eldorado was very quick to address this issue; it immediately entered into a massive $230 million deal for the two properties with Twin River Holdings.
A Few More Issues
While assets have been discussed for a long period of time, very few entities seem to have paid attention to the debt factor.
The new company will have to deal with a huge amount of debt – $13 billion, in addition to the lease amount of $12 billion, which takes the total to a staggering $25 billion.
Eldorado Resorts have been in and out of the news for a bunch of reasons. The company took a hit in June when Moody’s Investors Service pushed down the company’s Corporate Family Rating from B1 to B2 and Probability of Default Rating from B1-PD to B2-PD.
Caesars Corporation had to see a similar decline. The agency downgraded its Corporate Family Rating from B1 to B2 and Probability of Default Rating from B1-PD to B2-PD.