ATLANTIC CITY — Five state regulatory bodies have already approved the merger of Caesars Entertainment Corp. and Eldorado Resorts Inc., with New Jersey still patiently waiting its turn.
The $17.3 billion deal will require approval from 13 more state regulatory agencies and the Federal Trade Commission. Regulators in Pennsylvania, Louisiana, Iowa, Illinois and Missouri have all approved the merger that would give Eldorado control of nearly 60 casinos.
There is no set timetable for New Jersey regulators to make a determination on the merger, but the gaming operators have said they expect the deal to be finalized by the first half of 2020.
There has been little said publicly about the merger from either New Jersey regulators or the Atlantic City operators. Bob Ambrose, an industry consultant and adjunct professor of casino management, said that could be because of the potential impact the deal could have on the market, which could be more significant in Atlantic City than anywhere outside of Nevada.
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“There has to be conversations at this point, in the background. There has to be,” he said. “Just the logistics of it. ... It’s major for this market. So, I would be shocked if there wasn’t discussions going on right now (behind the scenes).”
In New Jersey, two regulatory bodies, the state Division of Gaming Enforcement and the Casino Control Commission, will be responsible for reviewing and approving the deal, respectively.
New Jersey and Atlantic City will play a critical role in the deal since the newly formed company, which will retain the Caesars name, would control four of the seaside resort’s nine casinos.
New Jersey gaming regulators will have to decide if the company’s operation of Bally’s Atlantic City, Caesars Atlantic City, Harrah’s Resort Atlantic City and Tropicana Atlantic City would create an undue economic concentration. Absent any changes, the proposed gaming company would employ 40% of the industry’s workers and represent nearly 37% of total gaming revenue in Atlantic City.
The two gaming companies submitted a joint petition to state regulators in September indicating the intent to present an economic analysis from Timothy Watts, managing director of National Economic Research Associates, that demonstrates the merger would not create an undue economic concentration.
The state Attorney General’s Office, under which the DGE operates, said New Jersey gaming regulators would also retain an expert.
“As required by law, the Division is responsible for ensuring the honesty, integrity and financial stability of casino licensees,” the office said in an email. “Part of this process is analyzing the economic impact of casino acquisitions such as the Eldorado / Caesars merger. As part of this process the Division has retained an economic expert to assist with the review of this merger.”
The proposed deal and its impact on the market in Atlantic City are further complicated by the fact that Caesars Entertainment has three outstanding deed restrictions on former casino properties. The former Atlantic Club Casino Hotel, the Claridge Hotel and the Showboat Hotel Atlantic City all have restrictions that prevent them from operating as gaming parlors.
Claridge and Showboat are currently operating as noncasino hotels. The Atlantic Club, which has been closed since 2014, was recently sold, and the new owner has said it intends to operate the property as a noncasino hotel.
Showboat owner Bart Blatstein has expressed his desire to resume gaming operations on his property and received a statement of compliance — a preliminary step that affirms his financial suitability — from state gaming regulators last year. Blatstein testified that he intends to circumvent the deed restriction by constructing a facility on an adjoining lot, but has yet to move forward with those plans.
EDITOR'S NOTE: This story has been corrected to reflect that five state gaming regulatory agencies have approved of the proposed merger.
