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Thread: Eldorado is going to sell some Caesars properties in Vegas -- but which ones?

  1. #1
    Eldorado Resorts bought Caesars back in June, but what now?

    Apparently they announced on June 24 that they would be selling some of their Las Vegas assets, in order to reduce financial pressure on the company. But which ones are going to be sold?

    Caesars currently has nine properties in the Vegas market: Caesars Palace, Paris, Bally's, Flamingo, Harrah's, The Linq, Rio, Planet Hollywood, and The Cromwell.

    Aside from Rio, they're all bunched together near the intersection of Flamingo and Las Vegas Blvd.

    Eldorado CEO Thomas Reeg said, "I think that there’s more Strip exposure than we would need to accomplish our goals with our regional database. So I would expect that we would be a seller of a Strip asset, but that decision has not been made."

    In English, he's saying that Caesars has too many Vegas properties, and they need to get rid of at least one.

    But how can one have too many properties in a market?

    According to the way Eldorado sees it, they really only need enough properties in order to accommodate people coming to the area specifically to stay at a Total Rewards/Caesars Rewards property. Basically, they want to offer Caesars Rewards properties in as many markets as possible, but not become overburdened in one particular market running too many hotels, just for the sake of having a lot of hotels.

    So now that they've picked up 9 Vegas properties, they're probably going to shed one or more.

    But which ones?

    Rio is almost certainly going to be dumped, but it can't be until the planned Caesars Convention Center is ready. That's currently slated for spring 2020, but that might not be in time for the World Series of Poker 2020 (which begins in late May, and needs months of planning ahead), so it's possible that Rio will stay as the home of the World Series for one more year. Rio is the only one of the nine properties with existing space and parking for large conventions.

    However, given that the Eldorado sale won't be closing until 2020 anyway, this is fine. Unless the Caesars Convention Center is delayed a lot longer than expected, Rio should be the first one to go.

    Planet Hollywood is another likely target, as the brand itself has gotten kind of stale in recent years, and it's the farthest one south in the clump of Vegas properties. It could also fetch a decent price because it would come with the Miracle Mile Shops, has a center strip location, and has decent enough rooms to where it could immediately function as a mid-grade strip hotel for the new buyer.

    The Cromwell is not large, and never really caught on as a must-stay boutique location as planned. It also comes with Drai's Nightclub, which could up the sale price.

    Right now it's assumed that Caesars, Paris, Bally's, and Harrah's are safe. Bally's and Paris are connected together and also share a gaming license, and it would be weird to separate them into different ownership. Caesars is the flagship hotel in Vegas and the only upper-end property they have in that market. Harrah's is a beloved brand for out-of-towners, and they probably wouldn't want to part with it, unless they were to sell Harrah's and rename one of the existing properties Harrah's, but that might confuse people.

    The Linq is also probably safe because it's connected to the new outdoor mall highlighted by the High Roller ferris wheel.

    El Dorado already has announced that they're selling two of their existing properties: Isle of Capri Kansas City and Lady Luck Casino Vicksburg.

    There are also rumors that Eldorado will be selling Montbleu in Lake Tahoe and Tropicana Atlantic City, in order to avoid the FTC from coming down on them for antitrust violations.
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  2. #2
    I assume, given the zero dollars put into refurbishing Rio rooms the last few years, that the Rio is the first to go. The WSOP announcers mentioned a few times that it was the last Rio this and that. The competing night clubs has never made sense. Caesars club competing with Drai's across the street is splitting the market. I'm an old Barbary Coast fan, so I'm personally hoping they dump the Cromwell (and somebody renames it). The Linq has too much money in it recently and further planned renovations to be sold, I think.

    The main problem with the takeover is that a reduction in properties means a considerable reduction in available rooms for Seven Stars, so the dominos will fall and lower end players will have a much tougher time getting rooms. Holidays will become impossible. Here's a blog plug featuring my brief version:

    https://theskepticalgambler.blogspot...similated.html

  3. #3
    I am hearing from my host that the Horseshoe properties will be sold off. That is troubling for us since Horseshoe is our home property. As the new entity scrambles to get ready to close this deal early next year no doubt many properties from both CZR and ERI will be sold off. Too early to tell at this point whether the end result will be good or bad for existing CZR or ERI players. If it were me I would sell off Rio, Planet Hollywood, and Harrah's in Vegas. That way the core Vegas properties would remain intact. The Harrah's property in Reno should be sold as well if they can find a buyer. I would also expect some renaming of properties of those that remain. The total rewards program next year is going to be a mess. CZR players are set to have their scores start over on Jan 1st. What happens if this deal closes some time next April? My guess is that they are going to keep something similar to what already exists and then come up with a new set of rules once the deal is finally closed.

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