On Monday, Eldorado Resorts, Inc. (NASDAQ:ERI) said it’s selling its namesake gaming property in Shreveport, La. to Maverick Gaming LLC for $230 million in cash.
The contract to sell the Eldorado Resort and Casino, which is likely to be finalized at some point this year, taunts with the company’s continuing effort to trim debt prior to the closure of its $17.3 billion takeover of Caesars Entertainment Corp. (NASDAQ:CZR). That transaction is scheduled to be completed in the first half of 2020; might even be in the current quarter.
In a statement, Eldorado CEO Tom Reeg said, “The agreement to divest the Eldorado Shreveport is consistent with our continued focus on reducing debt ahead of the expected closing for the Caesars transaction in the first half of 2020.”
As reported by casino.org, acquiring the Eldorado Resort and Casino gives the privately held Maverick, a base in a new region. Before announcing its venture into Louisiana, Maverick had been focusing on purchasing card rooms and smaller gaming venues in the western US, including Colorado and Washington.
Greedy Maverick disclosed transactions to purchase 25 Washington card rooms and three small casinos in the Centennial State in the last three months of 2019. The venue in Shreveport includes 1,500 slot machines, 50 table games, and a 400-room hotel.
Knew It Would Happen
Since ERI disclosed its takeover offer for Caesars last June, analysts anticipated Louisiana would be one of the places in which the companies could divest properties to lessen concentration and raise cash. The Pelican State has 15 riverboat casinos and Caesars’s land-based Harrah’s New Orleans. The two operators control six Louisiana gaming properties including that venue and the Eldorado Resort and Casino in Shreveport.
After the Maverick deal is completed and assuming no other sales there, Eldorado’s Pelican State portfolio will consist of the Belle of Baton Rouge, the Isle of Capri, Harrah’s New Orleans, Harrah’s Louisiana Downs, and the Horseshoe Bossier City. The company recently gained regulatory approval to bring the Isle of Capri ashore, becoming the first casino in the state to win permission to do that.
The transaction with ERI gives Maverick some contact with Texas gamblers who are forced to take their betting dollars in another place due to the Lone Star State’s strict viewpoint against casino gaming.
According to Maverick, “The population in the Dallas market exceeds 7.5 million people, and Dallas encompasses the third-largest concentration of Fortune 500 companies in the United States.”
Much of the Dallas-Fort Worth metroplex is an approximately three-hour drive to Shreveport.
ERI has been an active seller of gaming properties leading up to and following the disclosure of the Caesars buyout offer. Just days before that transaction was announced last June, the company said it would sell two venues in Missouri and one in West Virginia to Century Casinos and Vici Properties for $385 million.
After several weeks, in July, Eldorado said it handover the Isle of Capri Casino Kansas City, Mo., and the Lady Luck Vicksburg, Miss. to Twin River Worldwide Holdings for $230 million.
It’s also highly expected that when the companies officially combine, ERI could divest one or two Caesars properties on the Las Vegas Strip, and that the Northern Nevada market is ready for an asset sale, as the two operators look to lessen overlap there, as well.