Paragon Gaming Chairwoman Bennett Expects Lake Tahoe Sales Following Eldorado Resorts Caesars Takeover

Posted on: October 1, 2019, 10:57h. 

Last updated on: October 1, 2019, 12:43h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Eldorado Resorts is unlikely to keep three gaming properties in the Lake Tahoe, Nevada region after the company wraps up its $17.3 billion takeover of Caesars Entertainment.

Paragon Gaming’s Diana Bennett sees Eldorado Resorts selling two properties in Tahoe after it finalizes its Caesars takeover. (Image: YouTube)

That’s the view of Paragon Gaming chairwoman Diana Bennett, whose company is one of the owners of the Hard Rock Hotel & Casino in the Stateline area. Currently, Caesars operates Harveys Lake Tahoe and Harrah’s, while Eldorado controls the MontBleu Casino Resort & Spa in Stateline, Nevada.

I think you’re going to see two of those properties being sold again,” said Bennett in an interview with the Tahoe Daily Tribune. “That could be good for the area. With three of them being held by Eldorado, I don’t see see major improvements if they don’t get sold again. I could be wrong.”

Calling for a sale of one or two Lake Tahoe-area properties is, at this point, speculative. But if Eldorado pursues such a move, it could be the Caesars properties that are jettisoned. The regional gaming company has controlled MontBleu for just 18 months following the $1.85 billion deal in which it acquired that venue and the Tropicana Laughlin Hotel and Casino from Tropicana Entertainment.

As part of that transaction, Eldorado also gained operational control of Tropicana casinos in Indiana, Louisiana, Mississippi, Missouri, and New Jersey. Gaming and Leisure Properties owns the real estate assets involved in that deal.

Not A Far-Fetched Idea

Bennett’s theory that two Lake Tahoe gaming properties could be sold by Eldorado isn’t implausible. Prior to the company’s official reveal of its $17.3 billion offer for Caesars in late June, analysts opined that Eldorado would look to sell venues in markets where it has overlap with the Harrah’s operator, with some specifically highlighting Northern Nevada as one of those areas.

“Putting some money into them would be really important to making Stateline a more improved destination,” said the Paragon chairwoman, according to the Tribune.

Eldorado has already announced an array of asset sales leading up to and following the announcement of the Caesars offer. Last week, the Caesars Palace operator said it’s selling the off-Strip Rio Las Vegas for $516.3 million.

Industry observers expect further pruning of the Eldorado and Caesars rosters as the former looks to cut costs. Atlantic City, N.J. is another market that is widely discussed as a possible area for the companies to sell assets, because the two firms currently run four of the nine Boardwalk casinos.

Big Northern Nevada Footprint

The northern part of the Silver State is a practical option for the combined Eldorado/Caesars to part with some assets because of the sheer expanse of their current footprint in the region.

In addition to the MontBleu in Stateline, Eldorado runs three gaming venues in its home city of Reno. Caesars operates the two aforementioned Tahoe properties, as well as Harrah’s in Reno.

The takeover is expected to be completed in the first half of 2020 and the Caesars name will be retained, with Eldorado management running the new company.