Eldorado Resorts CEO touts company’s acquisition prowess
Eldorado Resorts CEO Tom Reeg touted his company’s acquisition prowess as rumors that the Reno-based casino operator held talks with Caesars Entertainment Corp. swirl.
“We think we are pretty good at buying assets that other people are running,” Reeg told Wall Street analysts during the company’s fourth-quarter earnings call Wednesday. “We are going to remain active [buying companies], and you should expect us to remain active.”
Eldorado has catapulted from a small operator of three properties in 2013 to one of the nation’s largest players with 27 properties in 13 states following a series of mergers and acquisitions. Eldorado has been able to significantly improve operations at the companies it has acquired and boost their cash flow, Reeg said.
“We run a hell of a lot better now than we did then,” referencing when the company had just a few properties, he told the analysts.
Reeg said the company, fresh off the acquisition of Tropicana Entertainment from activist investor Carl Icahn, can gobble up more assets.
“We feel very good about having our arms around our existing business and the ability to tack the next [deal] as it comes on line.”
Missing Vegas hub
Despite the series of acquisitions, Eldorado remains the only top-four U.S. operator by number of properties not to have a presence in Las Vegas.
Caesars Entertainment, the largest U.S. operator by properties, has nine resorts in Las Vegas while Penn National has two and Boyd Gaming 12.
They try to fill their Las Vegas properties with their regional guests, a business model known as “hub and spoke.”
Reeg said entering the Las Vegas market with just one hotel wouldn’t be effective because it wouldn’t give his regional clients a real choice.
“I think where you see operators struggle is where they have a single Vegas asset,” Reeg told analysts.
Strong economy
Reeg said he expected a strong year for Eldorado as unemployment and gasoline prices remain low and wages grow, a good backdrop for regional casinos.
MGM Resorts International and Caesars executives delivered a more subdued outlook for the Strip earlier this month.
Contact Todd Prince at 702-383-0386 or tprince@reviewjournal.com. Follow @toddprincetv on Twitter.
