Eldorado Finishes Acquisition Of Caesars, Shifting US Gambling Landscape

  • On Monday, Eldorado Resorts and Caesars Entertainment finalized a merger, structured as an acquisition by Eldorado, in a $17.3 billion transaction.
  • The newly merged Eldorado-Caesars company is the largest gambling company in the United States.
  • The two companies’ products will now be consolidated to streamline operations. In some cases, this will reduce consumer choice, but in others, it will increase consumer access to products.
  • The newly merged Eldorado-Caesars company (unclear what the final branding will be) will likely now look to capitalize on emerging online gambling markets in West Virginia and Michigan.

RENO, Nev. – After receiving approval from the Federal Trade Commission and gaming regulators throughout the country, Eldorado Resorts and Caesars Entertainment have finalized a $17.3 billion transaction that will merge the two companies.

The transaction is structured as an acquisition by Eldorado but is being marketed as a merger.

The deal was announced in summer 2019 and approved by the shareholders in November 2019, although nobody anticipated it would be finalized in the middle of a global pandemic.

The new merged company will be the largest gambling company in the United States and one of the largest in the world.

How Will This Merger/Acquisition Affect Gamblers?

The most notable effect this transaction will have is a consolidation of many gambling services that were previously provided separately by the two companies.

This is both good and bad for gamblers. Consolidation means fewer choices for consumers and more market homogony, but it also allows for the possibility of creative synergy. In other words, the two brands can work in tandem to provide services that weren’t possible as separate brands.

It is unclear what future innovations might stem from the merger, but it is known that British sportsbook William Hill will take over all retail and online sports betting operations at Caesars properties throughout the U.S.—55 total casinos in 16 states.

William Hill is Eldorado’s primary sports betting partner.

The new company will undoubtedly focus on expanding its existing online casino (Caesars) and online poker (World Series of Poker) brands to both new and established markets.

Outside of flagship states like New Jersey, the online casino and online poker markets in the United States are young and underdeveloped with lots of growth potential.

The new mega-entity that is Eldorado-Caesars could help with that development by flexing its considerable influence to create a pathway for more states to legalize online casino gaming and online poker.

Future Outlook For Eldorado-Caesars

As the largest gambling company in the nation, this newly merged company should be very successful. However, there are a few areas of concern that will need to be addressed as soon as possible.

The first and most obvious is the economic impact of the coronavirus pandemic on both Eldorado and Caesars, which rely heavily on tourism and hospitality to generate revenue.

Both companies furloughed most of their workforce back in April and Caesars plans to permanently eliminate 3,200 jobs. While this financial downturn should reverse once a COVID-19 vaccine is developed, it is still an enormous short-term blow.

The top priority for Eldorado-Caesars now that the transaction has been finalized will be to extend their market footprint into the emerging online casino markets of West Virginia and Michigan.

Doing so for either state will require a partnership with a brick-and-mortar casino. Eldorado formally owned the Mountaineer Casino in West Virginia but was forced to sell it to reduce debt in preparation for the Caesars transaction.

The Michigan market will be especially important as it is a high population state and should immediately become one of the top online gambling markets in the U.S.

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