Caesars Corp. buying Indiana properties for $1.7B

Updated November 17, 2017 - 4:24 pm

Caesars Entertainment Corp. has agreed to buy Indianapolis-based horse racing company Centaur Holdings LLC for $1.7 billion in the largest acquisition in the U.S. gaming sector this year.

The deal is expected to close in the first half of 2018.

Caesars will acquire Hoosier Park Racing and Casino in Anderson, Indiana, as well as the Indiana Grand Racing and Casino in Shelbyville, Indiana, the company said in a statement. The race tracks both feature 2,000 slots and own entertainment and dining facilities.

The deal marks the re-emergence of Caesars, which has been sidelined for years as its operating unit battled insolvency caused by a debt-driven expansion strategy and an economic downturn.

Caesars Entertainment Operating Co. filed for bankruptcy in January 2015 and emerged from bankruptcy a month ago. The company’s last major acquisition was the purchase of Planet Hollywood in Las Vegas for $700 million in 2009.

Chief Executive Officer Mark Frissora is aiming to create value through acquisitions by leveraging Caesars’ supply chain and Total Rewards loyalty program, which has 50 million participants.

Millions of visitors

Centaur properties receive 6.5 million visitors a year and have 1.1 million loyalty members. Centaur customers would be able to spend their points acquired in Indianapolis during a trip to Caesars’ properties in Las Vegas.

“We anticipate that the deployment of Total Rewards will bring substantial benefits to current Centaur customers, and the implementation of our centralized supply chain and efficient operating model will drive synergies,” Frissora said in a statement.

Caesars will pay $1.63 billion upfront and $75 million in deferred compensation. Caesars did not disclose how the deal would be financed. The company has about $2 billion of cash on its balance sheet, according to Union Gaming analyst John Decree.

The price represents an implied multiple of 8.3 times Centaur’s earnings before interest, taxes, depreciation, amortization and rent costs in year two following the closing of the deal, inclusive of expected synergies, Frissora said in the statement.

If table games are installed, the effective purchase price would be less than 7 times by that time, he said. The Indiana Legislature in 2015 enacted a law that would allow racinos to add table games in 2021.

“This deal will be a field test of the power of the Total Rewards loyalty program. Caesars has seen significant revenue uplift in the past when it has installed the network on properties,” said SunTrust analyst Patrick Scholes.

Sector Consolidation

The U.S. gaming sector has been experiencing increased consolidation in recent years as the huge debt burdens caused by the recession recede.

Many operators like Caesars now have stronger balance sheets and are using it to build on organic growth that is in the single digits.

They are finding willing sellers among private equity firms that bought casinos either right before or right after the Great Financial Crisis, said Union Gaming’s Decree.

”We are seeing a wave of private equity firms exit as their ownership life cycles come to an end and valuations are strong,” he said. ”It is a good time for many of the these companies to sell.”

Private equity firms’ investment cycle may last from three to seven years, though economic slowdowns can cause firms to hold on for longer periods.

Golden Entertainment agreed to buy American Casino & Entertainment Properties, the owner of the Stratosphere, in June for $850 million.

A month earlier, Meruelo Group, the owner of Grand Sierra Resort, agreed to buy the SLS Las Vegas for an undisclosed sum. Both American Casino and SLS were owned by private equity groups.

More to come?

Caesars may soon be scooping up more gaming assets, Frissora hinted in the statement.

”We have a strong financial position with solid cash flows to pursue other expansion opportunities with attractive returns,” he said

The acquisition trend will most certainly continue in the new year, said Decree.

”There will be more consolidation and deals in 2018 as there are almost no available gaming licenses up for grabs.”

Caesars shares closed down 43 cents, or 3.33 percent, at $12.32 on Friday.

Contact Todd Prince at or 702-383-0386. Follow @toddprincetv on Twitter.

Opendoor isn't the typical house flipping company
Unlike most house flippers, the company aims to make money from transaction costs rather than from selling homes for more than their purchase price.
The Venetian gondoliers sing Italian songs
Gondolier Marciano sings a the classic Italian song "Volare" as he leads guests through the canals of The Venetian in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal)
Building In Logandale
Texas homebuilder D.R. Horton bought 43 lots in rural Logandale. (Eli Segall/Las Vegas Review-Journal)
Indoor farming in Southern Nevada
Experts discuss Nevada's indoor farming industry. (Bailey Schulz/Las Vegas Review-Journal)
Former Fontainebleau could have become a Waldorf Astoria
Months after developer Steve Witkoff bought the Fontainebleau last summer, he unveiled plans to turn the mothballed hotel into a Marriott-managed resort called The Drew. But if Richard “Boz” Bosworth’s plans didn’t fall through, the north Las Vegas Strip tower could have become a Waldorf Astoria with several floors of timeshare units. (Eli Segall/Las Vegas Review-Journal)
LVCVA CEO Rossi Ralenkotter announces plans to retire
Rossi Ralenkotter, CEO of the LVCVA, on Tuesday confirmed a Las Vegas Review-Journal report that he is preparing to retire. Richard N. Velotta/ Las Vegas Review-Journal
Cousins Maine Lobster to open inside 2 Las Vegas Smith’s stores
Cousins Maine Lobster food truck company will open inside Las Vegas’ two newest Smith’s at Skye Canyon Park Drive and U.S. Highway 95, and at Warm Springs Road and Durango Drive. Cousins currently sells outside some Las Vegas Smith’s stores and at Fremont Street and Las Vegas Boulevard. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas home prices to continue to rise, expert says
Lawrence Yun, chief economist at the National Association of Realtors, gives homebuyers a pulse on the Las Vegas housing market. (Eli Segall/Las Vegas Review-Journal)
NV Energy announces clean energy investment
The company is planning to add six solar projects in Nevada, along with the state's first major battery energy storage capacity. Bailey Schulz/Las Vegas Review-Journal
3 Mario Batali restaurants on Las Vegas Strip to close
Days after new sexual misconduct allegations were made against celebrity chef Mario Batali, his company announced Friday that it will close its three Las Vegas restaurants July 27. Employees of Carnevino Italian Steakhouse, B&B Ristorante and Otto Enoteca e Pizzeria, all located in The Venetian and Palazzo resorts, were informed of the decision Friday morning. Bastianich is scheduled to visit the restaurants Friday to speak to employees about the next two months of operation as well as how the company plans to help them transition to new positions.
Nevada has its first cybersecurity apprenticeship program
The Learning Center education company in Las Vegas has launched the first apprenticeship program for cybersecurity in Nevada. It was approved by the State Apprenticeship Council on May 15. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas union members voting to authorize the right to strike
Thousands of Las Vegas union members voting Tuesday morning to authorize the right to strike. A “yes” vote would give the union negotiating committee the power to call a strike anytime after June 1 at the resorts that fail to reach an agreement. (Todd Prince/Las Vegas Review-Journal)
Small businesses struggle to find qualified candidates
A 2018 survey found that over two-thirds of small businesses in Nevada find it somewhat to very difficult to recruit qualified candidates. Bailey Schulz/Las Vegas Review-Journal
Nevada secretary of state website offers little protection against fraudulent business filings
Property developer Andy Pham tells how control of his business was easily seized by another person using the secretary of state website.
Caesars may be going solo in its marijuana policy
Several Southern Nevada casino companies aren’t following Caesars Entertainment’s lead on marijuana testing.
How much is the Lucky Dragon worth?
Less than a year-and-a-half after it opened, the Lucky Dragon was in bankruptcy.
Gyms and discount stores take over empty retail spaces
Grocery stores used to draw people to shopping centers. But many large retail spaces have been vacant since 2008. Discount stores like goodwill and gyms like EOS Fitness are filling those empty spaces, and helping to draw shoppers back in. K.M. Cannon/Las Vegas Review-Journal
Funding source of Las Vegas stadium for the Raiders is sound, expert says
The stadium is funded in part by $750 million of room taxes, the biggest such tax subsidy ever for a professional sports stadium. Robert Lang, executive director of Brookings Mountain West and The Lincy Institute at UNLV, says that is a good use of public funds. (Richard Velotta/Las Vegas Review-Journal)
Las Vegas needs light rail, expert says
Robert Lang, executive director of Brookings Mountain West and the Lincy Institute said he is afraid of a "congestion mobility crisis." Las Vegas needs a light rail system, he said, to accommodate the city's growing number of attractions. (Richard Velotta/Las Vegas Review-Journal)
Three takeaways from Wynn Resorts' Earnings Call
Matt Maddox came out swinging in his first earnings conference call as Wynn Resorts chief executive officer, boasting of record Las Vegas quarterly revenues and applicants lining up for work.
Star Wars VR Comes to Las Vegas
Sneak peak at the new "Star Wars: Secrets of the Empire" VR experience at the Grand Canal Shoppes.
Elaine Wynn continues her fight to change Wynn Resorts board
Elaine Wynn, the largest shareholder of Wynn Resorts Ltd., is seeking to kick a friend of her ex-husband Steve Wynn off the company’s board of directors. (Todd Prince/Las Vegas Review-Journal)
Zillow is getting into house flipping in Las Vegas
Las Vegas Review-Journal real estate reporter Eli Segall says flipping houses has waned in popularity after the housing bubble burst.
Ellis Island Buys Mt. Charleston Lodge
Ellis Island, which operates a casino, brewery and hotel just off the Strip, purchased the Mt. Charleston Lodge in early April.
Casinos to be penalized for allowing drug-impaired customers to gamble
Nevada Gaming Commission Chairman Tony Alamo talks about an amendment making casinos subject to the same disciplinary standards of preventing people to gamble if impaired by drugs as they are for letting them play while intoxicated by alcohol.
Terrible Herbst to open large travel center in Southern Nevada
The 50,000-square-foot commercial travel center will include 96 fuel pumps and the third White Castle restaurant in Southern Nevada. Wade Tyler Millward reports.
Art Bell’s Top 10 Shows
A selection of radio host Art Bell’s most popular shows.
Hooters owner talks about room upgrades at his hotel-casino
George Ruff, founder and senior principal of Trinity Hotel Investors L.L.C., owner of Hooters Hotel and Casino in Las Vegas, talks about recent room upgrades at the hotel. K.M. Cannon/Las Vegas Review-Journal
Passengers Discuss Allegiant Air
Allegiant Air passengers voice their views on the airline at McCarran International Airport on April 16, 2018. (Bailey Schulz/Las Vegas Review-Journal)
Longtime Las Vegas attorney John Momot dies at age 74
Criminal defense attorney John Momot, who represented mob figures and even played himself in the movie “Casino,” has died.
News Headlines
Home Front Page Footer Listing
You May Like

You May Like