Summary

In this episode, Nick and Dan catch-up with Rob Ziems, Chief Executive Officer at Gaming Arts. Listen as Rob covers the company’s acquisition by Merkur Group and explains how the combination is yielding dividends both culturally & developmentally. Learn about what’s brewing in the Gaming Arts lab, and hear the three debate whether the classic bootstrap / startup model remains a viable path for those wishing to build slot companies. Also in this episode, Tilman Fertitta finally lands Caesars.

Transcript

Nick Hogan:

Good morning, Dan. How are things in Vegas today?

Dan Cherry:

Wonderful morning, Nick. Good to see you. I should say good afternoon.

Nick Hogan:

So it’s late July, so I’m assuming it’s very hot where you are right now.

Dan Cherry:

Yeah. What are you going to do? I’m inside. I have air conditioning, so I’m safe.

Nick Hogan:

Okay. So Dan, we’re going to combine this month’s listener question with the news as it covers the same topic. Before I read that question, let me just say that we’d love to tackle any questions anybody listening may have. If you have a question that we’re presenting or something you’d like us to present, please drop us an email at reelcast@reelmetrics.com. Again, that’s R-E-E-L-C-A-S-T @reelmetrics.com. Our policy is to keep all questions anonymous, so please don’t worry about us revealing your identity. It’s not something we do. Okay, so this question comes from the Western US and it states, “Hi, guys. Last month I was surprised you didn’t talk about the Caesars acquisition by Tilman Fertitta. Would love to hear your thoughts. Do you feel there’s an actual business strategy behind this or is it just more financial engineering?” So many thanks to the listener for that question. I am kind of surprised we forgot to hit this last month.

But indeed the big industry news was that in late May Fertitta Entertainment announced an all-cash offer of $17.6 billion plus 11.9 billion in assumed debt for Caesars Entertainment, which represented a 49% premium over Caesar’s pre-announcement stock price. Not surprisingly, Caesars bit and it is going down. So as part of the transaction, the Carano family, which owns about 5% of Caesars, has agreed to roll over a portion of that equity into the new company, and it appears the entirety of the current management, including Tom Regan and his team, will remain at the helm. The transaction is obviously subject to a bunch of regulatory approvals. It’s projected to close in mid ’27 and CZR will be delisted from NASDAQ post-close.

So as to the listener’s question, I feel that this is a highly substantive acquisition and by no means just financial engineering. First, there’s the Caesars’ debt, which has really drug on the company for close to 20 years now. So it’s not going to be a cakewalk, but Fertitta’s plan is surprisingly detailed in terms of how they’re going to attack that debt. And then secondly, and this is what I find most interesting about this, Dan, is that Fertitta’s looking to build kind of this, I would call it a lifestyle ecosystem by merging the Caesars Total Rewards Loyalty Program with Landry’s Select, which is Fertitta’s restaurant loyalty program that covers, I think it’s around 500 venues, including Morton’s, Del Frisco’s, McCormick and Schmidt, et cetera. So it’s being packaged as kind of a dine locally, gamble globally concept. And I have to say that in terms of a demographic dovetail with Caesars, this could be big. It’s very interesting. So Dan, your thoughts on this one?

Dan Cherry:

Yeah, I don’t know. I mean, you mentioned the debt. It’s also the rent obligations as well to DaVici, and that’s always been one of the challenges. The other day, I was looking at just the list of Caesars properties and I knew they were big, but when you actually go state by state and start looking at the list of properties, it’s incredible.

Nick Hogan:

I think it’s 60 now, unless I’m-

Dan Cherry:

Yeah. And the crazy thing is there’s basically no overlap between the Fertitta and the Caesars properties. I think you have Lake Charles, Louisiana, where they would have two or three, and then you have Atlantic City where it would be four or five, but even there from a market share perspective, it’s not as big. So I’m sure there’s some strategic divestitures and spinoffs of properties that would happen to tackle the debt. But yeah, I mean, it seems like the non-gaming offering that Landry’s and Fertitta’s provides should be really complimentary to Caesars, especially in the regional markets and give them a competitive advantage. I mean, my sense has always been there’s probably some capital and reinvestment that has to happen in a lot of their, especially non-strip properties. I imagine his plan is get that debt down, improve the cash flows, and plow it back into the properties. So I mean, I always have the sense that his target demographic maybe was slightly different than Caesar’s with his non-gaming focus, a little more entertainment focus. So it’ll be really fascinating to see.

Nick Hogan:

Yeah, it’s been a thing that’s been in the works for a long time. I think he’s been eyeing that company since 2018, 2019. He’s really wanting to make something happen there. But anyway, I think it should be fascinating. It’s also interesting he’s keeping the entire management crew in place. Well, anyway, we’ll watch it with great interest to see where it goes.

Okay, Dan, it’s time to move on to today’s guest. This gentleman is a graduate of Indiana University and Drake University Law School, and that’s some serious Midwestern street cred there, Dan, who began his gaming career with station casinos all the way back in 1999, then moving on to associate general counsel and general counsel roles at Aristocrat and Progressive Gaming respectively. In 2011, he joined Aruze Gaming in a business development capacity, ultimately ascending all the way to the presidency some seven years later, and then in 2023, he made the jump over to AGS where he served as their chief business and legal officer for roughly three years. Then in mid-2025, he picked up his present role as chief executive officer at Gaming Arts. I’m referring, of course, to Mr. Rob Ziems. Rob, how are things in the Silver State today?

Rob Ziems:

Oh, fantastic. Good to see you guys. Thanks so much for