Carl Icahn not worried about Hall of Fame spot

Jul 10, 2019 3:00 AM

Carl Icahn is not in the Gaming Hall of Fame.

Could that be right?

It is. His name is missing from the list of influential figures who have been recognized for their positive influence on gaming.

How did those in charge of the Hall manage to avoid Icahn as they assembled the annual gathering of those who have made a significant difference in the gaming business?

It doesn’t matter because the billionaire activist investor is Page One news these days, putting all the right pieces in place to create a deal  that could send ripple effects far from Nevada.

Icahn bought into Caesars Entertainment and used his attitude as a shrewd buyer of “junk” that could be repackaged and sold for significant profit. Exactly what he did at the Fontainebleau project.

Icahn’s attitude toward his board at Caesars might have translated as a call to arms. “Let’s get moving. No sense sitting on our assets” he might he might have said in so many words.

Eventually, the Icahn team got together with Eldorado Resorts, the formerly sleepy little Reno casino company of the Carano family which went public about five years but was looking for more growth.

A lot of talk and paper-shuffling later we had a deal that had one analyst shaking head saying, “I didn’t see that coming.”

Eldorado Resorts has climbed to a place it’s never before, the top of the pile, the mountain’s peak, call it what you will. The result is impressive and leaves followers of the casino business wondering what happens now?

The most likely prospects: casino deals are waiting to be made. There are antitrust issues to consider and some states limit the number of casinos a single company can own. What these issues may involve remains to be seen.

Sales are likely in Atlantic City where the Caesars-Eldorado marriage will give the born-again Caesars four properties (Caesars, Harrah’s, Bally’s and the Tropicana) should the deal be accepted in its present form.

But in Las Vegas, the company now appears to have more “Strip exposure” than it wants. Tom Reeg, the super-charged CEO at Eldorado who will head operations, said as much during recent conversations. By the way, senior management will come from Reno, corporate headquarters will also remain there but there will be a significant “corporate presence” in Las Vegas, whatever that means.

There is no hurry to post “for sale” signs at any of MGM’s Strip properties which cover every price niche and there is evidence “several Caesars places will rate some careful study by MGM which may have an interest in one or more of the Midwest properties.

There are a lot of moving pieces on the table and there’s no telling what will make sense to this or that developer. For instance, so far there has been little said about the Rio and how it might be utilized. The talk about another sports stadium has sputtered and died.

The latest unconfirmed report is that some (maybe all?) of the Rio’s nearly 100 acres may become the site of a mixed use by development.

Let’s wait and see.

Eldorado is positioning itself in an attempt to be America’s pre-eminent gaming company. The deal, valued at $17.3 billion, creates something that has never been seen before in about  60 gaming properties under one ownership scattered 16 states.

Reeg said: “It is rare that you see a merger where because of the great synergies one plus one equals five. I look forward to seeing our investment prosper.”

Even Icahn had some friendly words for Caesars.

“There are far too many boards that, unlike Caesars, believe corporations are more like feudal systems, than democracies; that stockholders are the peasants who represent a necessary evil that must be tolerated, possibly patronized, but certainly ignored,” he said. “Much like the feudal barons, they hire mercenaries (lawyers and investment bankers) to deal with these peasants (stockholders), if they become too unruly...”

Ah, now I see why he didn’t make it to the Hall of Fame. 

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