Eldorado Purchased Caesars Entertainment
What a (Vegas news) week! Eldorado finally purchased Caesars Entertainment and SLS Las Vegas will once again become the Sahara. There are a lot of moving parts with the Eldorado purchased Caesars deal but I’ll try to keep it to Las Vegas and loyalty. I’ll try.
The rest of the Vegas news this week will be in the Quick Hits section. For what it’s worth, I think this is the best Quick Hits of the year! Okay, onto another blockbuster episode of “As Caesars Turns.”
As Caesars Turns
Eldorado Purchased Caesars
This week, Eldorado Resorts agreed to purchase Caesars Entertainment. The two companies will merge and be known as Caesars once the deal is approved. Here’s the press release with a bunch of financial mumbo jumbo.
The (Eldorado purchased Caesars) deal is not complete yet but it will make New Caesars the largest US casino owner operator with 60 casinos in 14 states. The deal has to be approved by the Federal Trade Commission and gaming regulators. The deal is expected to be finalized by the middle of 2020.
One of the main points throughout this negotiation is that Eldorado wants to “create synergies” by $500 million. This is another way of saying Eldorado plans to cut expenses at Caesars.
They will do this in different ways including reducing corporate expenses and duplicate staff. The combined company will give them increased purchasing power since it will be larger. Additionally, combining Caesars Rewards with the Eldorado’s players club will potentially increase visitation.
Eldorado also plans to sell at least one Caesars Las Vegas casino. Planet Hollywood has been in the sales rumor mill but Eldorado CEO Tom Reeg says they will evaluate the options. I expect Rio will be sold as well. Besides the rumors about a sale, Reeg never mentioned the property and referred to Las Vegas as the “Vegas Strip region” throughout their presentation.
Tilman Fertitta, the owner of the Golden Nugget, is still interested in purchasing Caesars Vegas Strip casinos. Phil Ruffin, the owner of Treasure Island is interested in buying the right Caesars property. I’d rather see new casino operators come to Las Vegas but it isn’t difficult to imagine Planet Hollywood become a new Golden Nugget and Ruffin buying Rio. Then again, maybe I just like saying, Ruffin Rio. Try it 5 times. It makes me giggle.
Caesars-Eldorado Merger Impact On Sportsbooks
Another way Eldorado can reduce expenses is to have the sports book operator they partially own, William Hill, operate some of the Caesars sports books. I wrote about all of the Eldorado and Caesars sports and sports betting deals here.
The Eldorado announcement call closed with an interesting note from CEO Tom Reeg to one of the stock analysts: “The further you get from the fundamental interaction between employees and customers where you make your money the worse you do.”
Throughout the call, he mentioned bringing decision making back to the Caesars properties. Eldorado makes money locally and they say they’ve seen success by having the employees have to run the properties. Reeg also mentioned that this is part of the problems at Caesars.
Interestingly, this is the opposite strategy as MGM Resorts. They’re centralizing operations with the Centers of Excellence in MGM 2020.
I don’t expect this to affect Las Vegas very much. Caesars already managed Las Vegas properties differently than the rest of the country. This will remain similar with a streamlined Vegas Strip region. The decentralization should affect other markets like Atlantic City.
Speaking of Atlantic City, Bally’s could be on the chopping block. If they sell Bally’s, I think Wild Wild West will become part of Caesars since they just built a new sportsbook. Eldorado doesn’t seem like they’re going to spend more money on another sportsbook when there’s already one attached to Caesars.
New Caesars Quick Hits:
- Las Vegas hotels: Eldorado repeatedly touted Caesars’ recent hotel renovations of 95% of the Vegas Strip rooms. Don’t expect to see any new hotel room renovations when they take over. They expect to do some minor changes to public areas but nothing major.
- Caesars Rewards will continue: Eldorado “One Club” members will migrate to Caesars Rewards when the deal is done. Caesars Rewards is one of the main reasons for the purchase so I don’t expect to see many changes on the surface to start.
- Reducing Caesars Rewards offers: We might see a decrease in complimentary rooms when Eldorado take over. They mentioned there will be 10 million more people using Caesars Rewards and this will increase competition for comp rooms. This is just a hunch based on the tone of the discussion.
- WSOP: New Caesars will keep the World Series of Poker. Vital Vegas says WSOP will remain at Rio next year regardless of who owns the property. Eldorado has a deal with The Stars Group for online gaming so there could be changes with WSOP.com in the future.
I think I’ve touched on most of the ways the Eldorado merger with Caesars will affect Las Vegas. You can see the easy to read presentation here. If you have an hour to kill you can listen to the presentation call here.
Good news: As Caesars Turns will continue for another season as casinos are sold and a new corporate structure takes effect. Yippee!
I think this is the more useful Vegas news this week but that’s probably just me. Here’s what else is happening in and around Las Vegas.
SLS Las Vegas is rebranding and will be known as Sahara Las Vegas this fall. There isn’t much other news about this besides a slogan that Mandalay Bay is already mocking. The renovation budget increased by 50% from $100 million to $200 million. Read more about that here.
This is useful information for those of you that want to plan a vacation to Las Vegas around a Vegas Golden Knights game. The NHL released the home and away schedule for the 2019-2020 season. Read more here.
Ever since Virgin Hotels Las Vegas was announced the company has said that they will have an outside casino operator. Well, now we have some insight. Vital Vegas says Mohegan Sun will run the casino. This isn’t confirmed yet so there aren’t official details. This week I did learn that guests can you their Momentum Dollars from Mohegan Sun in CT at Resorts AC, Poconos, & Ilani. I’m guessing this will the same in Las Vegas once this info is confirmed. That would be nice for Mr. TravelZork. Read more here.
A bagel store opened at Excalibur! This follows the exciting french fry shop opening this week. Viva Excalibur! Read more here.
Expect to see new restaurants at SLS Las Vegas. They’re being sued for not paying restaurant licenses. Read more here.
There’s another non-casino hotel being built just off the Vegas Strip. Marriott is building the first ever Delta hotel on Flamingo near Valley View (west of the I 15). For all the drunks, there will also be a Denny’s and a Del Taco here. Read and see more here.
There is a HUGE rap festival called Day N Vegas coming to Las Vegas. The show features more than 10 rappers with a first name of “Lil.” Two of my favorite rappers right now, Kendrick Lamar and J. Cole, are performing. You may not know all of the names but the show is already sold out. Read more here.
Speaking of music, Dionne Warwick will have a residency later this year at Caesars Palace. See dates here.
How about this for Vegas abroad? MGM, Bellagio, and Aria hotels (no casino) will be opening in Dubai. Read more here.
AEG will operate the new Las Vegas Raiders football stadium. They’re a huge entertainment company and have some of the biggest festivals in the country. This should bring the high-level entertainment that you expect from a Las Vegas venue. Learn about AEG here.
Goodbye Hawaiian Marketplace across from Aria. Get ready for new retail and dining in the future. Read more here.
Casino operators (not just Las Vegas) are using artificial intelligence to make more money. Read more here.
There’s going to be a reality show based in downtown Las Vegas. Auditions are only for professional actors so this probably won’t show the dirty side of DTLV. Read more here.
Virtual Reality in Vegas is a thing, man. Check it out here.
Ever want to buy a minor league baseball team, mall, and other stuff? Well, the Howard Hughes Corp. (owners of Las Vegas Aviators, Downtown Summerlin, etc.) might be on the market. Read more here.
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