On Monday, TSG announced a 20-year deal that will allow it to “own, operate and brand” online betting, casino and poker operations in the 13 states in which Eldorado currently operates, pending passage of the necessary legislation and license availability.
TSG’s deal gives it “first skin access” to online gambling in states where Eldorado operates more than one casino and second skin access in other applicable states. Eldorado will provide TSG with access to its government relations personnel to help with online licensing efforts and Eldorado’s suppliers “will equally share all costs related to licensing and permitting.”
Eldorado already has a 25-year partnership with UK bookmaker William Hill in which the latter serves as Eldorado’s exclusive land-based betting partner. Hills “has consented” to the Eldorado-TSG tie-up and “will share in the economics” of the deal. Hills also retains Eldorado’s first and third skin options for online sports betting in all the applicable states.
The deal will see Eldorado receive a revenue share from TSG’s affiliated online offerings as well as 1m TSG common shares – worth roughly $25m at today’s price – plus a further $5m in TSG shares following the latter’s exercise of its first option. Based on certain performance benchmarks, Eldorado will also have the right to acquire further TSG shares in five years’ time at a price of $23.22 apiece.
TSG CEO Rafi Ashkenazi hailed Eldorado as “one of the fastest growing regional companies” in the US and said the deal “establishes the foundation for our U.S. strategy as we tactically pursue access to other key states and opportunities with potential media partners.”
Eldorado CEO Gary Carano returned the compliment, calling TSG “one of the world’s largest, most licensed and most geographically and product diverse publicly listed online gaming companies” with a “proven ability to leverage their products to gain share in the growing market for online gaming.”
Eldorado has dramatically expanded its geographic presence – now totaling 28 gaming properties – in recent years, thanks to the $1.7b acquisition of Isle of Capri Casinos in 2016 and this spring’s deal for Tropicana Entertainment.
TSG’s BetStars brand recently launched its first US online sports betting operation in New Jersey via its existing online gambling deal with Atlantic City’s Resorts Casino & Hotel. TSG also has a pending online deal in Pennsylvania.