After A Record-Breaking Year, Eldorado Resorts May Keep Expanding

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Eldorado Resorts is becoming a major force in the casino and gaming industry. After a number of acquisitions over the past few years, including Tropicana in 2018, the national casino operator has properties all over the country.

Eldorado Resorts now has 27 properties in 13 states and there are plenty of rumors that Eldorado isn’t done expanding their holdings. Here are states you can find an Eldorado Resorts property:

Eldorado Resorts expansion leads to a record-breaking year

On a recent earnings call, Eldorado touted how well business is going. In 2018, Eldorado Resorts had record-breaking operating results for the fourth quarter and full year. Business is doing well at both their existing and newer properties around the country.

Newly acquired properties like Tropicana in Atlantic City, NJ are doing better than expected but so are existing Eldorado properties. Overall, same-store sales saw a 22 percent increase in 2018 from the previous year.

Sports betting at Eldorado Resorts

Things are looking up for Eldorado Resorts and they expect sports betting will have a big impact on future growth. They currently operate casinos in five states with legal sports betting:

  • Mississippi
  • Nevada
  • New Jersey
  • Pennsylvania
  • West Virginia

William Hill is Eldorado Resort’s main sports betting partner. The sportsbook operator will offer land-based and mobile sports betting solutions for Eldorado Resorts. Eldorado Resorts also has a 20 year deal with The Stars Group (AKA BetStars) as a second mobile sports betting partner.

In their earnings report, Eldorado had the following to say about sports betting:

“We also positioned the Company to benefit from the expected expansion of sports wagering and online poker and casino gaming through long term agreements with William Hill and The Stars Group to access our licenses for online sports wagering for real money online gaming and poker operations and, in the case of William Hill, operate our retail sportsbook. In connection with our agreements with William Hill and The Stars Group, we received equity interests in William Hill US, William Hill plc and The Stars Group, and we will also share in revenue generated from betting and online gaming activities. Our partnerships with Cordish, William Hill and The Stars Group are modeled, in part, after our successful joint venture that developed and opened a hotel at Scioto Downs in early 2017 and which has contributed to Scioto’s positive operating results.”

New customers thanks to sports betting

During the earnings call, Tom Reeg, chief executive officer of Eldorado Resorts, shared some information about their sports betting customers. They’re seeing new customers that are younger than the typical guests at their properties. These are new customers that wouldn’t have visited the casinos previous to legal sports betting.

The bottom line for Eldorado and sports betting is that it’s working exactly how they expected it would work. Expect to hear more about Eldorado as more states where they have casinos legalize sports betting.

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Expansion rumors — and Caesars Entertainment?

Last year, Eldorado Resorts expanded by purchasing the day-to-day operation of seven Tropicana casinos from Carl Icahn. Gaming and Leisure Properties, Inc. (GLPI) owns the land underneath the casinos.

The new properties were spread out over six states. This purchase not only expanded their holdings but also brought their properties to another level. Tropicana in Atlantic City and Grand Victoria Casino in Elgin, IL. are performing well and cater to a more affluent customer than some of their properties.

Their old buddy from the Tropicana deal, Icahn, has made a major investment in Caesars Entertainment and is looking to have the corporation sell itself. Caesars has even allowed Icahn to name three seats on its board of directors.

Coincidentally, or not, Caesars Entertainment operates eight casinos in Las Vegas, the one major void in Eldorado Resorts holdings.

On the recent earnings call, Reeg discussed the possible expansion with Caesars. While they’re perfectly happy with the direction of Eldorado Resorts, they’re always looking at potential mergers and acquisitions.

Previous opportunities in Las Vegas haven’t made sense for the company since they would have been with individual casinos. Without naming Caesars Entertainment, Reeg said “the hub and spoke model has value.”

Its casino customers might not want to stay in one particular hotel-casino in Las Vegas, ut are much more apt to travel when they can choose from a number of properties that suit their vacation budget.

He went on to say that Eldorado Resorts is set up for success and doesn’t need to be in Las Vegas. They will consider any deal as long as they can drive value with the acquisition.

Whether or not the next deal is with Caesars Entertainment, Eldorado is definitely a company to keep an eye on in the future.

Marc Meltzer

About

Marc grew up on the mean streets of the South Bronx. He's the rare combination of Yankees and Jets fan which explains his often contrarian point of view. Marc is a freelance writer and social media consultant. Writing about steak, booze, gambling and Las Vegas is a tough job but somebody has to do it.

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