The long-awaited discussion of Eldorado Resorts’ (NASDAQ:ERI) $17.3 billion takeover of Caesars Entertainment (NASDAQ:CZR) by New Jersey regulators is being pushed back, potentially delaying efforts to wrap up the deal in June.
The New Jersey Casino Control Commission (CCC) is scheduled to meet June 10. But the transaction creating the largest domestic company will not be on the agenda, unidentified sources told M&A by Reorg.
The coronavirus pandemic delayed several state-level meetings, including in Indiana and Nevada, in addition to the Garden State, integral to moving ERI’s takeover of the Caesars Palace operator forward. In March, it was reported that the earliest the New Jersey Division of Gaming Enforcement (NJDGE) could make a recommendation on the acquisition would be early this month, meaning it would have been mid-May before the CCC could discuss it.
That time frame is off the table, and the best-case scenarios are the CCC either calling an emergency meeting later in June, or taking up the subject in July. New Jersey regulators claim that even if the Federal Trade Commission (FTC) soon greenlights the deal, it won’t have enough time to consider it at its next meeting.
Casino.org reached out to the CCC and the NJDGE for comment, but didn’t hear back prior to the publication of this article.
Not Enough Time?
A skeptical view of the not-enough-time excuse reportedly being offered up by Garden State regulators is that the reasoning doesn’t hold water because it’s been nearly a year since Eldorado proposed the $17.3 billion takeover.
From the outset, New Jersey was seen as a potentially high regulatory hurdle for the Caesars suitor, because the combined company would have owned four of the nine casinos on the Atlantic City boardwalk. That stoked fears of concentration risk. But rumors swirled that regulators would also balk at the idea of a venue closure.
Some of those concerns were recently allayed when ERI and Caesars last month announced the sale of three gaming properties, including Bally’s on the Boardwalk, to Twin River Worldwide Holdings for $180 million.
Earlier this month, Eldorado CEO Tom Reeg said the operator is “optimistic” all necessary regulatory approvals would be in place by the end of June, but acknowledged there have been disruptions attributable to COVID-19.
Indiana, Nevada
The Indiana Gaming Commission (IGC) meets in the middle of the month, though it’s not immediately clear if that body will consider ERI’s pitch to acquire Caesars in June. IGC’s concern with the deal isn’t so much about concentration risk in the Hoosier State as it is ERI’s experience operating race tracks, which it has.
In Nevada, it’s expected the deal will be approved. It’s just a matter of when. The Nevada Gaming Control Board’s (NGCB) next scheduled meeting is June 10, with the Gaming Commission (NGC) following on June 25.
Some agenda items for the June 25 NGC meeting are available online, but no mention of Eldorado or Caesars is found in those documents.
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