On Tuesday, New Jersey made some further movement in the casino game as state gaming officials stamped approval on the Eldorado Resorts Inc. as a brand new parent company for the Tropicana Atlantic City.
Casino Control Commission officials met for roughly two hours to discuss the notion as they eventually approved Eldorado Resorts Inc. a full license as a casino holding corporation. Based in Reno, Nevada this marks the first spot in Atlantic City for Eldorado gaming.
An interesting part of all this is with Eldorado being approved in Atlantic City as a casino operator it sets up further issues. A possible deal with Caesars Entertainment Corporation could be there in the future if the two companies decide to merge.
If this deal between Caesars and Eldorado comes to fruition and the two companies combine as one, the Casino Control Act would be at the forefront. Caesars and Eldorado would own a total of four of the nine casino licenses in the Atlantic City area if this deal does indeed go through. However, the Casino Control Act has a provision that states an “undue economic concentration” and that would certainly be looked at with a lot of eyes.
Eldorado Resorts Inc. CEO Thomas Reeg was asked by state Commissioner Sharon Harrington about the plans for the companies future partnerships and acquisitions, pointing to the one that about Caesars.
“I can’t comment on a particular (move),” Reeg told the Press of Atlantic City survey by the Amercian Gaming Association. “I would say we have been an inquisitive company in the past. To the extent there are opportunities that make sense for our shareholders ... we would take a hard look at those.”
Reeg also said in a statement that these big deals always has “a host of concerns that other constituencies would have” but hopefully Eldorado as a company would “thoughtfully work them.”
A Billionaire Wall Street investor by the name of Carl Icahn owns just about 29 percent ownership stakes in Caesars Entertainment Corporation. He sold Tropicana Entertainment to Eldorado last April for $1.85 billion.
In total, Eldorado is in charge of 12 states in terms of operating casino hotels. Along with New Jersey, Colorado, Florida, Illinois, Iowa, Louisiana, Mississippi, Missouri, Nevada, Ohio and West Virginia are all in place for the company.
With the lease that is setup, Tropicana Atlantic City is projected to haul out the largest sum of money because the casino property is the top net revenue generator in Eldorado’s vast portfolio.
Casino Control Commission Chairman James Plousis told the Press of Atlantic City that he fully expects the Eldorado company to “positively contribute to this market and support Atlantic City’s continued upward trajectory.”
“A significant part of Atlantic City’s future is the ability of the gaming industry to grow its customer base and thereby bring new customers to the market,” Plousis said.
In the area, Tropicana Atlantic City is the second-biggest source of gaming revenue in the market just below the Borgata Hotel Casino & Spa.
Tropicana will see an updated casino look behind capital projects that were invested by the new owners since the acquisition. Also, just about $10 million for the William Hill sportsbook.
“Tropicana is built to compete,” Tropicana Senior Vice President Steve Callender said. “With the money we’ve invested over the last five or six years, from a diversification standpoint, we outpoint every casino in Atlantic City. There’s just more to do here, more to see and more to be involved with.”
Casino Control Commission Vice Chairwoman Alisa Cooper asked Eldorado president and chief operating officer Anthony Carano what truly appealed him to Atlantic City. Carano told the Press of Atlantic City that it had a lot to do with the history of the Tropicana resort and the significance inside the current gaming industry landscape.
All in all, the work has been laid out and with this partnership between the Tropicana and Eldorado, the resources are only that much richer for both of the companies and the Atlantic City as a whole. There are some concerns, especially with the possible Caesars deal in place with Eldorado, but as of now this looks like a nice fit for the state of New Jersey.
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