Caesars & VICI Sell Harrah’s Racino For $22M
Gaming and entertainment giant Caesars Entertainment, and racino operator and co-owner VICI, have reportedly agreed to offload Harrah’s Louisiana Downs Racino on buyer Rubico Acquisition Corp. in exchange for US$22 million.
Of the US$22 million, following the usual capital adjustments, the casino group will apparently pocket US$16.5 million, and VICI the remaining US$5.5 million. The deal is according to Caesars Entertainment’s recent Thursday announcement confirming the existence and terms if the sale agreement, expected to be concluded either late this year, or early next year.
Harrah’s Louisiana Downs racino, which racino is located in Bossier City, consists of a racetrack and accompanying casino and entertainment complex. The actual casino floor features 800 slot machines. The property itself belongs to landlord VICI Properties.
Caesars Actively Creating Value
Caesars Entertainment, even more so given the current economic climate, has been working round-the-clock at trying to actively seek out opportunities known to create shareholder value. The best practical example of this is the casino and entertainment giant’s recent July-finalised merger with Eldorado Resorts – a deal worth a phenomenal US$17.3 billion.
And newly formed company CEO Tom Reeg wasted no time explaining the merger as having been the direct result of Caesars as well as Eldorado having shared a vision of making increased shareholder value a reality. And it’s a reality and directive that obviously extends all the way even to the recently inked Harrah’s Louisiana Downs sale.
The industry, in the meantime, has been keeping a close eye on Reeg and the realisation of the commitments made at the time of the Caesars-Eldorado merger, says prominent casino industry economic analyst Howard Jay Klein. And what the industry has witnessed so far is according to Klein, post-crisis growth and increase in shareholder value largely propelled by a shaking off of perceived liabilities, the freeing up of disposable capital, and a renewed and much tighter focus on the type of culture that positions the customer at centre-stage. Something which, incidentally, has always been a part of Eldorado culture, said Klein.
VICI’s Future Ownership
As far as practical considerations go, Caesars has confirmed that the previously agreed-upon rental payments and provisions of the letting agreement between it and VICI Properties will remain unaltered.
VICI is in fact a company originally spun off by Caesars Entertainment Corp itself. Caesars in 2017 re-established VICI as a separate property holdings company – with VICI’s current ownership portfolio consisting of several leading entertainment brands, including Bally’s, Horseshoe, and Harrah’s. In addition to these, VICI also own four major championship golf courses.