As Eldorado Resorts and Caesars Entertainment set out on their journey to become one massive gaming company, they had to make a lot of stops along the way. Each state in which they have a presence has to approve the marriage, and the two have dutifully made their rounds across the country, gathering all the necessary signatures to achieve their multibillion-dollar goal. There’s only one more stop to go and, while all the previous ones have been relatively mundane, this one is proving to be more challenging. New Jersey is the last stop on the list, and regulators seem to have a hard time reconciling the pros and cons of the potential merger.
The last couple of months have proven to bring great news to those who favor the merger, as the Federal Trade Commission (FTC) said yes, which led to yes votes by Nevada and Indiana – two of the last three states that had to weigh in. Indiana was expected to be the more difficult signature to obtain, but it turns out that the Garden State, with all its gambling and revenue problems, isn’t overly thrilled with the idea. The Department of Gaming Enforcement (DGE) still hasn’t been able to make a decision, with deliberations and testimony about to enter their third day.
To make matters worse, it would appear that those providing testimony aren’t making things any easier. Perhaps they haven’t been able to express themselves properly, or perhaps officials with the DGE haven’t been able to pay enough attention because of all the problems in the state. Either way, confusion remains, and Deputy Attorney General Tracy Richardson asserts, In reflecting on the testimony presented, the division’s concerns, as they relate to the overall uncertainty associated with the transaction, remain.”
The DGE has to reach a decision before the Casino Control Commission (CCC) makes the call that will determine if the casino operators’ attempts to secure approvals over the past year were a waste of time. Indiana had been concerned about a lack of experience in horse racing and too much control over the state’s gambling, but still managed to need only a day to come to grips with the merger and give it the green light. The delays in New Jersey, which inarguably needs to change its standard operating procedures in order to get back on track, seem to be congruent with the state’s decision-making track record.
Tom Reeg, CEO of Eldorado, has already told the DGE that the company is fine with the stipulations laid out by the DGE, which include the release of deed controls on certain Caesars assets, and that the company is ready to spend up to $400 million to update several Garden State casinos. That figure would be increased by $125 million if Twin River Worldwide can’t take possession of Bally’s, a separate deal that is already in the works. Reeg gave his testimony on Wednesday, yet, the DGE can’t reach a conclusion. Either that, or it just wants everyone involved to sweat a little – a tactic not beyond the realm of the Jersey psyche.
