Louisiana endorsed a $14 billion merger that would transfer control of Harrah’s land-based facility in New Orleans, but not before regulators on Thursday criticized the new owner’s neglect of a Baton Rouge property it already owns.
In what Bloomberg’s described as a minnow swallowing a whale, tiny El Dorado Resorts, based in Reno, is taking control of industry giant Caesars’ Entertainment. The new combination, if approved by some dozen more states, as expected, will control 60 casino-resorts in 15 states, including five properties in Louisiana, making El Dorado the largest casino owner in Louisiana and the nation.
“Are you and your executive staff up to the task to make sure that you spread the attention to all the properties in all the states in which you operate?,” Louisiana Gaming Control Board Chairman Ronnie Jones asked Tom Reeg, El Dorado Resorts chief executive officer, prior to the regulatory board’s vote. He spoke after noting that the Baton Rouge casino has not received much of the company's investment and is underperforming.
Jones pointed out that Reeg and his entourage stayed Wednesday night at a competitor’s, L’Auberge Casino Hotel, even though his company’s Belle of Baton Rouge property has a hotel.
“I understand that the fact that I stayed at L’Auberge last night is comment on our view of the state of that property as it sits today,” Reeg said of the Belle.
But Reeg, a former banker, added that his staff is looking at bringing the Belle of Baton Rouge riverboat onshore and into an adjacent atrium that once was a cluster of warehouses and then a failed shopping mall in the Catfishtown neighborhood near downtown Baton Rouge and almost under Interstate 10 bridge over the Mississippi River.
He added, “We understand that asset in its current state is not acceptable to the state and it’s not acceptable to us either … The next time we’re in front of you that situation will be different.”
Winnings by casinos in the Baton Rouge market were down 5% in December from a year ago, as all three of the city’s riverboats saw a drop in bu…
Jones said since the El Dorado acquired control of the Belle, only $1.1 million has been invested – most of that for updated slot machines and gambling equipment. Except for upgrading the air conditioning, the company has spent only about $50,000 on the Belle of Baton Rouge’s hotel, which is in the atrium.
“I don’t want Baton Rouge to get lost in the weeds. I can’t permit that to happen on my watch,” Jones said.
Reeg said El Dorado is spending more than $500 million in Louisiana during the next four years, including $325 million on improving Harrah’s New Orleans Hotel, casino and surrounding neighborhood along with $110 million to bring a riverboat casino ashore near Lake Charles. That’s a lot of pull on the company’s resources just now, he added.
Reeg said El Dorado planned to make Harrah’s New Orleans its flagship in the south and would be spending on the hotel, the casino and further development of the nearby Fulton Street pedestrian mall.
El Dorado hopes to take control of Caesar’s Entertainment by June in a complex deal that includes buying all of Caesars’ stock at $12.75 per share. A side agreement allows VICI Properties Inc. to acquire some of the companies’ real estate and lease them back, generating $3.2 billion of revenues. El Dorado will also pick up the financially troubled Caesars' significant debt.
Caesars’ shareholders will acquire 49% of El Dorado’s stock, losing control of the company’s assets but retaining the name. El Dorado will pick six of the 11 members on the new board and will change its name to Caesars Entertainment Inc. Reeg will be in charge along with El Dorado Chairman Gary Carano.
Eighteen months after the Louisiana Legislature allowed riverboat casinos to move on dry land, the Gaming Control Board approved the first app…
El Dorado started in 1973 as a single Reno casino-hotel, owned by Don Carano, a lawyer whose family still owns about 15 percent of the stock. The company has bought and merged its way into operating 23 properties in 11 states.
Caesars is one of the storied casino companies that began as the Hilton Hotels’ 1947 foray into casino gambling in Cuba and the Caribbean. The company went through various mergers and sales until acquired by Harrah’s in 2005. Harrah’s began in 1938 as a Reno bingo parlor.
Both Caesars and El Dorado shareholders voted Nov. 15 to merge pending regulatory approval, which is expected by mid-year.
The Eldorado Resort and Casino in Shreveport is being sold for $230 million to Las Vegas-based Maverick Gaming LLC, a mostly regional casino o…
The Federal Trade Commission raised anti-trust concerns, leading the companies to sell a casino in Shreveport and other properties. When the dust settles El Dorado will own Harrah’s New Orleans, Horseshoe Bossier City, Isle Lake Charles, Louisiana Downs Bossier City, and the Belle of Baton Rouge.