Eldorado Resorts, one of the casino industry’s most active companies on the acquisition front in the past few years, told the market Thursday it wasn’t done buying.
On a conference call with analysts to discuss second quarter results, executives from the Reno-based company said the still have appetite for deals. Eldorado has several large and small asset transactions working their way through the system – including a $1.85 billion acquisition of Tropicana Entertainment in partnership with real estate investment trust Gaming and Leisure Properties.
However, based on “what’s actively being shopped,” Eldorado CEO Gary Carano said the company wouldn’t be buyers. “But we’re poised to take advantage.”
One deal – Eldorado’s $327.5 million acquisition of Grand Victoria Casino in Elgin, Ill., from MGM Resorts International – was approved Thursday by the Illinois Gaming Board. The company expects the deal to close in third quarter.
Eldorado is acquiring the operating assets of seven Tropicana-owned casinos in six states from corporate raider Carl Icahn. The properties include the Tropicana Atlantic City; two casinos in Nevada – Tropicana Laughlin and MontBleu Resort in South Lake Tahoe; Tropicana Evansville in Indiana; Belle of Baton Rouge in Louisiana; Trop Casino Greenville in Mississippi; and Lumière Place in St. Louis. The deal is expected to close by the end of the year.
Adding in the 10 states where Eldorado already operates 20 properties, CFO Thomas Reeg said the company becomes “a very attractive partner” considering the growth of sports wagering.
“What we present to a potential partner is a map a most of the U.S.,” Reeg said.
Eldorado, which has operated sports books in Reno, expects to be operating at its regional properties “where we can by football season.”
Reeg was bullish on sports betting, especially in Atlantic City. He said the activity has been “under-estimated” by the regional markets. Sports betting customers do more than just bet on games and a casino doesn’t need to offer incentives to get them through the door.
“This group of customers come in because there is something on TV,” Reeg said. “This is the kind of customer who shows up to bet, drink, visit your restaurants, plays a bit in the casino and stays in your hotel. The regional markets will really benefit.”
During the second quarter that ended June 30, Eldorado’s net revenue was $456.8 million, 21 percent higher than the same quarter a year ago. The company’s net income of $36.8 million, or 47 cents per share, reversed a net loss from the same quarter of 2017.
Eldorado rebranded its three interconnected flagship Reno casinos – Eldorado, Silver Legacy and Circus Circus – as “The Row,” which covers six city blocks.
“’The Row’ leverages our integrated design and property enhancements and amplifies the convenience, amenities, entertainment and quality (of the three resorts),” Carano said in a statement.
Eldorado is planning a renovation of 400 rooms at the Silver Legacy and will open its Brew Brothers microbrewery restaurant at casinos in Iowa and Missouri. Also, Eldorado will begin a room renovation project to all 402 rooms at the company’s Colorado properties that is expected to be completed in the first quarter of 2019.
Shares of Eldorado, traded on the Nasdaq, closed at $41.40 on Thursday, down 5 cents or 0.12 percent.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
