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Reno-based Eldorado Resorts anticipating sports betting boost

Updated August 2, 2018 - 5:37 pm

Reno-based regional casino operator Eldorado Resorts Inc. saw revenue improve by nearly 22 percent in its second quarter with record cash flow, the company reported Thursday.

Eldorado, which is establishing a foothold in Southern Nevada with its acquisition of Tropicana Entertainment and its resort in Laughlin, also announced that the Illinois Gaming Board earlier Thursday approved its $327.5 million acquisition of the Grand Victoria Casino in Elgin, Illinois.

Tropicana Entertainment is not affiliated with the Las Vegas Strip property with that name.

Eldorado’s 20 properties in Pennsylvania, Colorado, Missouri, Louisiana, Iowa, West Virginia, Ohio and Florida sets the stage for the company to introduce sports wagering when those states authorize it. Eldorado also has two properties in Mississippi, where sports betting went live this week, and three in downtown Reno.

The Tropicana deal will give Eldorado a foothold in New Jersey, which has already legalized sports betting.

The company reported net income of $36.8 million, 47 cents a share, on revenue of $456.8 million for the quarter that ended June 30. In the same period a year earlier, the company showed a net loss of $46.2 million, 68 cents a share, mostly attributable to acquisition costs, on revenue of $375.6 million.

Eldorado President Tom Reeg told investors on a Thursday earnings conference call how sports betting is going to help regional gaming companies like his.

“We have conversations with you all the time about how casinos attract customers, and basically the playbook is pay ‘em to show up in some form or fashion with free play or rooms or meals,” Reeg said. “This is a group of customers that shows up because something’s on TV. That’s really good for casinos.”

Reeg said being positioned in New Jersey and Pennsylvania will give the company access to customers from the population centers of Philadelphia and New York City.

“That’s going to draw customers that otherwise were never going to see your property and it’s the kind of customers that you want — they sit in your sports book and they make bets and they drink with their friends and they wander onto the casino floor and they stay in your hotels and they eat in your restaurants and it costs you nothing to get them into the property.

“Me and my friends used to fly to Vegas on a six-hour flight,” Reeg said. Now, that group is going to have an option 90 minutes from their house.”

Eldorado stock closed down 5 cents, less than 1 percent, to $41.40 on average trading volume Thursday. After hours, the price rose $1.10, 2.7 percent, to $42.50 a share.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

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