Caesars Entertainment agreed to a merger with Eldorado Resorts on Monday. The deal is valued at $17.3 billion, and Eldorado will be assuming the debt of Caesars Entertainment. The deal comes a couple of years after Caesars survived Chapter 11 bankruptcy and is expected to be finalized sometime in 2020.
The company will operate under the name Caesars and will now include 60 properties in 16 states, as well as Caesars’ international presence in five other countries. Eldorado’s management team will lead the new company. One of the main reasons for this mega-deal has to do with the booming sports betting and online gambling market in the United States.
Benefits Of Deal
One of the biggest assets of the deal for Eldorado will be access to Caesars’ millions of customers across the country. Thanks to the merger, the newly combined company will have access to around 60-65 million people. Another benefit of the deal is Caesars’ Partnerships with major companies.
Caesars is currently partnered with the NFL, Turner Sports, ESPN, and DraftKings Sportsbook. Caesars Entertainment’s deal with ESPN includes the creation of a new broadcast studio at its Linq property in Las Vegas on the strip. Turner Sports also has a new studio under construction at Caesars Palace. They even have partnerships with a few sports teams directly in the Baltimore Ravens, New Jersey Devils, Philadelphia 76ers, and the future Las Vegas Raiders.
Caesars also has its hands in the online sports betting and online poker market. In New Jersey and Nevada, Caesars has an online poker and casino presence. Caesars currently offers sports betting in four different states.
Eldorado Assets
Eldorado has its hands in a lot of different operations as well. Eldorado recently agreed to acquire 20 percent of William Hill US back in September of 2018. They also have a partnership with The Stars Group, which gives Eldorado stake in the newly created FOX Bet. Eldorado also offers sports betting in four different states.
Together the two companies have sports betting in Illinois, Indiana, Iowa, Mississippi, Nevada, New Jersey, and Pennsylvania. We can expect them to enter into other states, such as Arkansas, as sports betting continues to spread to more and more states.
William Hill Reaction
William Hill released a statement on the deal and how it will affect sports betting:
“William Hill entered into a strategic partnership with its long term business partner Eldorado in September 2018. Under the agreement, William Hill gained the right to exclusively operate sports books at all properties owned or managed by Eldorado in the United States and to operate mobile sports betting in states where Eldorado obtains a license. These rights apply to casino properties owned or managed by Eldorado when the strategic partnership was signed and any subsequent acquisitions. Therefore, the rights apply to casinos currently owned or managed by Caesars if Eldorado’s acquisition of Caesars is completed.”
This is a big win for William Hill as they seem to have the exclusive right to operate all sportsbooks under this newly combined operation.
This deal to combine Eldorado and Caesars will eventually have a huge impact on the sports betting market in the United States. Mega-deals such as this have been denied in the past by the Federal Trade Commission (2016’s attempted merger of FanDuel and DraftKings was shot down due to threats of litigation). It will be interesting to see if this deal will pass all the regulations.
Nothing is official until approval is granted. However, if the deal is eventually finalized, this will make the newly combined company the number one gambling and sports betting company in the United States.