How Will The Caesars And Eldorado Merger Affect Las Vegas?

Posted on Categories Hotels

You may have heard that Caesars Entertainment and Eldorado Resorts have agreed to merge. There won’t be any immediate changes. The deal isn’t expected to close until sometime in the first half of 2020. When the merger is complete, the new Caesars will have about 60 properties in 14 states.

There will be changes to Caesars throughout the country as the two companies merge. Caesars will also have different leadership as Eldorado will take over operations. Eldorado plans to find $500 million in “synergy.” One way they’ll reduce expenses to decrease duplication from both companies. This will affect everything from employees to properties.

The two companies have plenty of overlap with properties in the same market. You can see a map in this presentation. Casinos are already being sold. The sales will continue in other markets – including Las Vegas.

Fewer Caesars Las Vegas Casinos

Caesars customers that visit Las Vegas will see fewer casinos once the deal is complete. During a conference call to discuss the merger, Eldorado CEO Tom Reeg said that they will look to sell at least one Vegas Strip property. He didn’t mention Rio at all during the call. It’s possible Rio could finally be sold after years of rumors. Right now, Caesars Entertainment operates the following Las Vegas casinos.

There are rumors that existing Las Vegas casino operators (Golden Nugget, Boyd Gaming, Treasure Island) are showing interest in whatever Caesars property/properties might be on the market. There are also rumors that there could be new operators buying their first Las Vegas casino.

No Hotel Room Upgrades

Over the past few years, Caesars Entertainment has upgraded about 90% of its Vegas Strip hotel rooms. The upgrade cycle is coming to an end with renovations at Paris and Harrah’s.

These upgrades were a selling point to Eldorado. The money Caesars has spent recently is money that the new company won’t have to shell out. During the merger call, Reeg said that they will not be improving the Caesars hotel rooms on the Vegas Strip.

In fact, Caesars Las Vegas properties won’t see much improvement once the sale is complete. Reeg said they plan to upgrade some public spaces but the changes will be minor.

More Players Club Competition

The two casino players clubs will merge as well. Eldorado Resorts’ players club members will become Caesars Rewards loyalty club member when the deal is complete. The deal should benefit Eldorado Resorts One Club members the most.

The merger will add 10 million Eldorado Resorts One Club members to the existing 40 million Caesars Rewards. Eldorado Resorts players club members will have access to a host of new benefits.

The most exciting perk for Eldorado Resorts players club members is that they will have access to complimentary rooms at Las Vegas casinos for the first time. Having 10 million more people trying to get the same complementary and discounted rooms will be challenging.

The additional Caesars Rewards members could make it more difficult for existing members to get access to the same deals they had prior to the merger. The number of comps and discounts won’t increase. However, the number of people searching for those deals will increase.

Since so many new customers will likely be looking to use their Las Vegas deals, there could be fewer for existing members once the deal is finished.