From Baltic Ave. to Boardwalk

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When you’ve lived in Las Vegas for several decades, as I have, you almost become immune to big stories.

This is particularly true of gaming news. Openings and closings have been a fairly regular occurrence here, especially in the last 20 years as our economy has bounced up and down and right and left like a UFO outside Area 51.

But a recent gaming story really caught us old-timers by surprise: the announcement that Eldorado Resorts, a non-distinct casino company based in Reno, was buying the most iconic name in the gaming world, Caesars Palace, and its portfolio of 60 properties. As Bloomberg News described it, “This was a minnow swallowing a whale.”

When I think of Eldorado, the name that comes to mind is the Carano family, who are also known for their Ferraro-Carano wine brand. For those of us in southern Nevada, we remember Glen Carano as a star quarterback for the UNLV Rebels in the late 1970s, who went on to a nice career as a backup QB for the Dallas Cowboys. He was part of two Super Bowl winning teams in the 80s.

There is also Glen’s daughter Gina Carano, who first gained fame as a stunning and plenty tough MMA fighter, whose beauty has allowed her to compile a heady resume as a movie star in action films.

Eldorado began with a single casino opened in Reno in 1973 by Donald Carano, a lawyer and Glen’s father, who died in 2017. The business has grown exponentially in recent years under the direction of Tom Reeg, its chief executive who will lead the combined Eldorado-Caesars along with oldest son Gary Carano and the rest of Eldorado’s management.

Those wondering how this takeover occurred — the equivalent on a Monopoly board of Baltic Avenue being traded for Boardwalk and Park Place — one need look no further than the gaming puppetmaster Carl Icahn, who could be considered the most successful gambler ever to bet money on Las Vegas.

Some history is in order: after the financial crisis of 2009, Icahn purchased the 70 percent completed Fontainebleau for a yard-sale price of $148 million. He then sold all the resort’s furniture, rugs, and mattresses, and let the project sit idly for eight years as a reminder of how devastating that crisis had been. But patience has its virtues. In 2017 Icahn sold the property to the Vector Group for $600 million, a $450 million profit.

Just a few weeks earlier in 2017, Golden Entertainment and its fearless boss Blake Sartini bought the Stratosphere for $850 million from Goldman Sachs. That transaction was preceded two decades earlier by Icahn’s purchase of the bankrupt Stratosphere and his buyout of minority shareholders for pennies on the dollar. He eventually sold the Strat at the height of the market cycle to Goldman Sachs for $1.3 billion.

Earlier this year, Icahn bought a 15 percent stake in Caesars and demanded and got three board seats. With this power play, he then pushed for the company to be put on the market.

When the deal with Eldorado was announced in late June, Icahn said, “It is rare that you see a merger where because of the great synergies one plus one equals five, but I look forward to seeing our investment prosper.”

One would be foolish to poo-poo Icahn’s strategy when you look at his track record. With one bold stroke, Eldorado moved into the first tier of powerful resort companies.

You would have to go back to the late 1960s, when Howard Hughes and his brain trust of Parry Thomas and Bob Maheu orchestrated the takeover of six Las Vegas hotel-casinos, to find a time when a reclusive billionaire had taken such bold steps to transform the ownership of Strip properties.

With Eldorado’s announcement that it was keeping its headquarters in Reno, does this suggest that a level of balance between the northern and southern halves of the state has been restored? Of course not. But there’s no question that northern Nevadans are puffing their chests out a little farther than they have in the last decade.

This transaction is one to watch as carefully as one observes the boom and bust cycle that Icahn has so often predicted correctly.

Dwell on this for a second: Caesars Palace is now under Reno ownership. If that doesn’t stir your chili, nothing will.

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About the Author

Jack Sheehan

Vegas Vibe columnist Jack Sheehan has lived in Las Vegas since 1976 and writes about the city for Gaming Today. He is the author of 28 books, over 1,000 magazine articles, and has sold four screenplays.

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