Let’s Make A Deal: Caesars Selling Bally’s To Twin River Holdings

Posted By Bill Gelman on April 24, 2020

Bally’s Atlantic City is no longer going to be included as part of the Caesars-Eldorado merger.

Las Vegas-based Caesars Entertainment and VICI Properties Inc. announced the sale to Twin River Worldwide Holdings Inc. via press release.

The purchase price is approximately $25 million in cash. VICI will receive approximately $19 million from the sale, while Caesars will get about $6 million.

Atlantic City casinos remain closed due to the coronavirus pandemic. The property recently celebrated its 40th anniversary at Park Place and the Boardwalk.

For Monopoly players, this is prime real estate. New Jersey regulators will need to approve the deal.

What Caesars and VICI are saying

Bally’s and Caesars will still be connected via the Wild Wild West annex.

Once the deal goes through, however, Caesars will retain ownership of the cowboy-themed gaming space along with The Book, AC’s largest sportsbook.

VICI Properties will maintain ownership of Caesars’ land and real estate.

Tony Rodio, Caesars CEO, commented on the deal:

“We look forward to the reopening of Bally’s Atlantic City as soon as (it’s) appropriate, once the public health emergency related to COVID-19 has passed.
“We appreciate Twin River’s commitment to this property, which has a great future ahead under its stewardship.”
This, of course, means the pending Caesars-Eldorado merger, which remains on target to close later this year, will include one less AC property.
Eldorado owns the Tropicana, while Caesars and Harrah’s Resort fall under the other ownership group. Like with the Bally’s deal, regulatory approval is still needed.
John Payne, the president and COO of VICI Properties, also weighed in: 
“The sale of Bally’s Atlantic City demonstrates our ongoing commitment to work collaboratively with our tenants to optimize our individual businesses, even during these unprecedented times.”
“This transaction allows us to maintain the existing financial terms of our master lease with Caesars and helps balance our geographic diversification as we work to complete the acquisition of Harrah’s Resort Atlantic City,” Payne said.

Bally’s to join Twin River’s expanding portfolio

Bally’s is one of three properties that Twin River is acquiring. The Rhode Island-based company announced in a separate press release that it’s buying two Eldorado properties in a $155 million deal.

Eldorado Resort Casino Shreveport and Mont Bleu Resort Casino & Spa are the others. So, once both sales close, Twin River will gain access to the Louisiana, Nevada and New Jersey markets.

The company currently owns and manages seven casinos, two in Rhode Island, one in Mississippi, and one in Delaware. The portfolio also includes three casinos, as well as a horse racetrack that has 13 authorized OTB licenses in Colorado.

George Papanier, the president and CEO of Twin River, commented on the growth opportunity:

“These acquisitions represent a unique opportunity to continue executing on our expansion and diversification strategy at attractive valuation multiples.”

“We see significant opportunities to create cross marketing connections for customers at multiple Twin River locations, and we look forward to applying our proven operating and integration approach to drive incremental revenues and cash flows.”

Bally’s still needs some TLC

Getting Bally’s for a bargain-basement price means prime opportunities for reinvestment.

The property welcomed its first guests back on Dec. 29, 1979, making them the third oldest in terms of casino seniority.

Resorts Atlantic City arrived one year earlier on May 26.

Caesars was No. 2, opening the doors on June 26, 1979.

The Bally’s complex includes 1,500 slots machines, 105 table games and 1,251 hotel rooms.

And until the deal closes, Bally’s AC will continue to be part of the Caesars Rewards network.

Besides making property upgrades, improving the casino business should be priority No. 1.

For 2019, Bally’s finished last among the nine casino properties in both casino win ($176 million) and total gaming revenue ($181.5 million).

The newer Ocean Casino Resort ($238.2 million) and Hard Rock ($350 million) fared much better in total gaming revenue.

And the numbers are currently taking a significant hit as a result of casinos being closed since March 16. Last month’s land-based numbers paint a small picture of the economic impact.

Of course, it’s not just about the land-based earnings anymore. NJ online casinos reported an all-time high of $64.8 million for March.

Plus, now that Bally’s will be breaking away from Caesars, there are internet gaming and NJ sports betting growth opportunities.

Twin River will also acquire the license to build out a sportsbook and launch online sports wagering and casino products.

Reopening Atlantic City is the first step.

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Bill Gelman

Bill Gelman is a veteran sports writer based just outside of Philadelphia and not too far from the Jersey Shore. Bill spends time in Atlantic City writing about casino openings and expansions, special events and now NJ sports betting and online gambling.

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