The CEO of casino operator Eldorado Resorts, Tom Reeg, believes that his company will be able to close its $17.3 billion merger with Caesars Entertainment Corp. by the end of June, as originally anticipated.
Mr. Reeg is set to take the reins of the enlarged casino and hospitality group when the mega-deal is finalized.
During Eldorado’s first-quarter earnings call on Monday, the company’s top official offered some much-needed optimism about the revival of the casino industry as Nevada and other states are gradually easing restrictions on public life amid the Covid-19 pandemic and many businesses, including casinos, are soon set to reopen.
Eldorado’s Q1 net revenue dropped 17.5% year-on-year to $473.1 million due to the closure of its properties around the US in the face of the coronavirus pandemic that hit the nation, and the rest of the world, to halt as we know it.
It appears that Mr. Reeg believes the worst might be over for his company and the entire sector and that we are “going to see margins that are quite impressive” once gambling venues are allowed to resume operations.
The executive further commented that as other places have reopened and social distancing has somewhat been eased, “there has been enthusiastic recommitment by consumers” that is hoped to be witnessed when casinos reopen doors and resume welcoming patrons.
Caesars Outlines Reopening Plan
In an address last Thursday, Nevada Governor Steve Sisolak announced that the Silver State would enter Phase One of its reopening on Saturday, May 9. And according to Caesars’ CEO, Tony Rodio, Strip properties will likely be able to reopen before the end of May, if there is no spike in confirmed coronavirus cases.
On Monday, Caesars detailed its reopening plan for Nevada and other states where it operates properties in, saying that it would resume operations at some of the casino resorts across its network when permitted by government and tribal bodies.
In locations where the company runs multiple properties, it would reopen them in phases in line with demand and capacity.
Caesars said that it has developed a comprehensive health and safety plan that would be implemented across all its properties to ensure the health and well-being of its team members as well as of guests and visitors.
The health and safety program includes enhanced cleaning and sanitization of public spaces and guest rooms to help curb the spread of the coronavirus. In addition, all property employees will be required to wear face masks, while some employees will be provided with additional PPE such as gloves.
Patrons will be encouraged to wear face masks but will not be required to do so. The company said that its properties will facilitate and encourage social distancing practices, including by limiting table game seats and slot machines on the casino floors.
Some sources suggest that in Las Vegas, Caesars’ flagship Caesars Palace resort would be its first to resume operations.
Mr. Reeg said that he believes Caesars will fare better than many of its Strip competitors as it relies less on group business, including trade shows, and more on its loyal rewards members. The Eldorado boss elaborated that “the group business seems to be clearly laggard in terms of recovery”, but of all Strip resort operators, Caesars is “the least exposed to the group business.”
Merger Still Needs Regulatory Approval
Eldorado, too, is preparing to reopen its 23 properties across 11 states. The company expects its Louisiana operations to be the first to resume in the post-Covid-19-shutdown era after Gov. John Bel Edwards said on Monday that the state’s casinos would be allowed to reopen with 25% capacity this coming Friday.
Eldorado is also clearly busy preparing for its merger with its larger rival, Caesars. The deal still needs approval from the Federal Trade Commission, the Nevada Gaming Commission, and the New Jersey Casino Control Commission, among other regulators.
Despite the challenges both companies have faced these past two months, they have continued pushing toward closing their tie-up as soon as possible. Last month, they offloaded three properties to Twin River Worldwide Holdings to probably mitigate competition concerns that might have been raised by the FTC.
Mr. Reeg said on Monday that it was very clear to them that their best option was to continue and close the Caesars merger and that all of the upsides from the mega-deal are still there and available to both companies.
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