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Eldorado Caesars Ent. merger still hopeful

In other gaming industry news, former Nevada Gaming Control Board chairwoman Becky Harris said she sees no reason why gaming regulators would block the $17.3 billion merger between Eldorado Resorts and Caesars Entertainment.

The merger still needs to be approved by the Federal Trade Commission (FTC), as well as by regulators in Nevada, New Jersey and Indiana. So far seven states have approved the merger where the new company retains the Caesars name and Nasdaq listing.

Caesars operates 53 properties in 14 states, while Eldorado owns and operates 23 properties in 11 states. Currently all 76 properties are closed as state and federal health officials look to stem the tide of the coronavirus outbreak.

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Harris, who served as chair for two years, told an investors’ conference call organized by SunTrust Robinson Humphrey analyst Barry Jonas, said she didn’t believe the two companies would have to reopen their properties to get approval from regulators.

“Also, while the current (Nevada Gaming Commission) Chairman Tony Alamo recently announced his decision to step down … Harris noted the deal could be approved without an acting chair - important given prior appointments have sometimes seen lengthy processes,” Jonas wrote in a research note. He expects a June closing for the deal.

Harris said she sees a few reasons to support the deal going through in a timely manner, namely that the companies have enacted solid employee welfare programs amidst closures. 

She added that the combined company would have meaningful regional exposure which could see a faster recovery than the Las Vegas Strip, and that other state gaming commissions are likely to follow the FTC’s and Nevada’s decisions.

As far as potential concerns that could lead regulators to vote against the deal, Harris cited any unsavory past relationships or lack of compliance, adequate liquidity to pay bills, inadequate financial resources, and any questionable legal records.

According to the terms of the deal, Eldorado will pay $8.40 per share in cash and 0.0899 shares of Eldorado stock, or $12.75 per share, for Caesars. Since the deal was announced in June 2019, both Eldorado and Caesars have sold properties that could eliminate any potential anti-trust issues.