Caesars and VICI Set To Sell Harrah’s Louisiana Downs Casino For $22m
Las Vegas-based casino operator Caesars Entertainment, Inc. and real estate investment trust (REIT) VICI Properties announced that they will be selling Harrah’s Louisiana Downs Casino, Racing & Entertainment to Rubico Acquisition Corp., in a deal worth an estimated $22 million.
The proceeds from the deal will be split between Caesars ($16.5 million) and VICI ($5.5 million), with adjustments for net working capital and cash. Caesars and VICI also affirmed that the annual base rent payments from their Regional Master Lease will be unaltered.
VICI is a REIT that broke away from Caesars in the fall of 2017 after Caesars’ long and complicated bankruptcy process. VICI currently owns several Caesars-operated properties in the US, such as the iconic Caesars Palace, and leases their use to Caesars.
Industry analysts expect the offloading of Harrah’s Louisiana Downs to be concluded by early 2021. The sale is the first asset divestment undertaken by Caesars since their blockbuster $17.3 billion merger with Eldorado Resorts was finalized in late July of 2020. The merged companies took on the Caesars brand as it was more popular in the US and abroad.
Caesars to Sell Off More Properties Soon
Caesars is also expected to offload more properties in the next few months. Eldorado previously stated that they would be selling their Eldorado Resort Casino in Shreveport to Twin River Worldwide Holdings, in a deal that should be concluded by early 2021, with consideration to timely regulatory approvals.
Once both properties are sold off, Caesars’ entire gaming portfolio will be comprised of 50 properties spread out across 16 states, one of the biggest in the world.
Caesars had sold off several of its assets in the months before their merger with Eldorado. In April of 2020, Caesars and Eldorado stated that they are looking to offload Eldorado’s Montbleu Resort, Casino and Spa in Lake Tahoe, Nevada and Caesars’ Bally’s Atlantic City Hotel & Casino to Twin River.
Twin River will pay $155 million for the Eldorado properties, on top of $25 million for Bally’s Atlantic City Hotel & Casino.
State Regulators Required Offloading
Caesars’ and Eldorado’s spree of offloading properties was initiated by regulators from a number of states in order to prevent their merged companies from attaining a monopoly on gaming markets across the US.
Both companies complied, as refusing to offload some of their properties risked their license applications getting rejected due to competition rules.