Eldorado Resorts announced today that it has entered into a 20-year definitive agreement with The Stars Group (TSG) which Eldorado will provide TSG with options to obtain access to Eldorado’s second skins for online sports wagering. Eldorado Resorts Inc. shares rose more than 9% Monday following the announcement.
In addition, TSG will have an option to access its third skin to operate real money online gaming and poker operations in the United States.
Under the terms of the agreement, Eldorado will receive a revenue share from the operation of the applicable verticals by TSG under Eldorado’s licenses. Eldorado will also receive an upfront equity interest in TSG of $25 million, and Eldorado may receive an additional $5 million in TSG equity upon the exercise of the first option by TSG. A further equity stake may be provided to Eldorado after five years, based on TSG net gaming revenue generated in Eldorado’s markets, the value of which will come at a fixed ratio based on $23.22 per TSG share.
TSG will operate under Eldorado’s licenses using TSG’s significant portfolio of online brands and its turnkey online sports technology services and Eldorado is providing TSG with access to its government relations personnel as TSG seeks additional licensing. Eldorado’s suppliers will equally share all costs related to licensing and permitting.
Pursuant to the terms of the agreement announced between William Hill and Eldorado on September 5, 2018, William Hill US remains Eldorado’s exclusive provider for land-based retail sports wagering and has consented to the Company’s agreement with TSG. William Hill US will share in the economics of The Stars Group transaction and will have access to Eldorado’s first and third skin for online sports betting in all states.
Eldorado Resorts owns and operates twenty-eight properties in thirteen states, including Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, New Jersey, Ohio, Pennsylvania and West Virginia.
