State gaming regulators approved a $17.3 billion merger between Eldorado Resorts Inc. and Caesars Entertainment Corp., the final hurdle to creating what will be the nation’s largest casino operator.
The agency’s action means that a single operator will eventually control four of Atlantic City’s nine casinos — a gambling juggernaut comprising Caesars Palace Atlantic City, Bally’s, Harrah’s Resort and The Tropicana.
The primary issue during the CCC’s hearings was whether the merger would significantly reduce competition. Two of the merger partners’ rivals — Hard Rock Hotel Casino and Ocean Resort Casino — sought to oppose the transaction, but CCC rebuffed the move.
CCC Chairman James Plousis, during the hearing, said that if not properly overseen, the new company “would be in a position to harm fair competition in the Atlantic City market,” but said he was comfortable that a series of checks and balances would minimize that risk.
When the deal was announced, the companies said Eldorado would acquire all of Caesars’s shares for $12.75 each — $8.40 a share in cash and 0.0899 share of Eldorado’s common stock for each of Caesars share. Eldorado would also assume Caesars’ debt, which is about $8.8 billion.
Caesars shareholders were offered a consideration election mechanism, subject to proration. When the deal closes, Eldorado will own 51 percent of the combined company and Caesars will hold 49 percent.
One of Caesars’ properties – Bally’s Atlantic City – is being sold to the Rhode Island-based Twin River Holdings LLC for $25 million.
Atlantic City’s casinos only recently began reopening at reduced capacity after being ordered to close as part of the state’s effort to suppress the spread of the COVID-19 pandemic. During the shutdown, businesses in the resort town laid off thousands of workers as the gaming industry endured a steep downturn.