Eldorado Resorts Acquires Properties Including Tropicana Entertainment Inc
Eldorado Resorts, a Nevada-based gaming company, announced acquisition deals today that would expand their presence into several new markets and thereby increase their portfolio of hotels and casinos.
The operator will purchase Grand Victoria Casino in Elgin, Illinois, which is currently co-owned by Las Vegas giant MGM Resorts International and Hyatt subsidiary RBG, LLP. Eldorado Resorts will pay $327.5 million, money acquired from previous asset sales and ongoing operations, plus loans under a revolving credit facility. It is anticipated that the acquisition will be complete in the fourth quarter of 2018, after regulatory approval and other closing conditions are finalized.
Grand Victoria Casino operates 1,088 slot machines, 30 table games, and a poker room with 12 tables. It also features a garage and event facilities, plus several dining locations, and designated space for meetings and banquets.
In a separate press release, Eldorado Resorts announced its intent to purchase Tropicana Entertainment Inc., which owns properties in six states and Aruba. Currently owned by New York hedge fund manager Carl Icahn, the gaming and hospitality company will cede control to Eldorado Resorts for seven of Tropicana’s eight properties.
The definitive agreement was valued at $1.85 billion. Gaming and Leisure Properties, a subsidiary of Penn National Gaming, will pay $1.21 billion the seven allocated Tropicana properties via a master lease agreement that will give Eldorado Resorts permission to operate the relevant properties. Eldorado Resorts will then be responsible for the remaining $640 million of the deal.
The master lease will have an initial term of 15 years and feature a chance for a 20-year renewal after that time. Tropicana intends to shed the Tropicana Aruba Resort and Casino prior to the deal’s close. It is anticipated that the acquisition will be completed in late 2018.
The seven Tropicana hotel and casino properties that will be acquired include properties in Atlantic City, Nevada, Missouri, and more. This will introduce around 7,900 slot machines, 265 table games, 5,400 hotel rooms, and a quantity of retail, entertainment, and dining facilities to Eldorado Resorts’ existing properties.
The two major acquisition deals represent a trend in consolidation within the US casino industry, particularly in land-based facilities. Several major US-based gaming organizations have gone through merger and acquisition moves recently with the intention of expansion across the country.
Deals in the last year include Penn National Gaming’s announcement that it would purchase fellow operator Pinnacle Entertainment for $2.8 billion. Las Vegas giant Caesars Entertainment Corp., also announced the $1.7 billion purchase of Centaur Holdings late last year. The company’s main operating unit recovered from bankruptcy in fall 2017.