Last week, Eldorado Resorts, Inc. announced that it completed the acquisition of Tropicana Entertainment, Inc. from Icahn Enterprises.

It’s a bit of a complicated transaction, valued at $1.85 billion, but I will do my best to explain it. Eldorado merged a “subsidiary” into Tropicana and then Tropicana became a subsidiary of Eldorado, but not before selling most of its real estate to Gaming and Leisure Properties for $1.21 billion. One of those properties was Lumière Place Casino and Hotel, which Eldorado bought. Eldorado, in turn, will lease the properties that Tropicana sold for $640 million.

Gary Carano, Chairman and Chief Executive Officer of Eldorado, said:

Our acquisition of Tropicana marks a continuation of Eldorado’s successful history of rapid growth through strategic, accretive acquisitions. Through this combination, we have significantly expanded the scale of our gaming operations, further diversified our geographic reach into new markets – some of which have already adopted sports wagering legislation — and minimized market-specific risk. We continue to focus on enhancing shareholder value through strategic transactions, return-focused property enhancements and opportunistic partnerships with third parties – including the Tropicana transaction, the Grand Victoria acquisition and our recent agreements with The Cordish Companies and William Hill PLC.

Eldorado Has Been Making Moves

That last part happened just over a month ago, as Eldorado entered a partnership with William Hill in which William Hill will operate sports books in Eldorado properties. Online sports betting and online gaming are also part of the deal.

The purchase of Tropicana adds the following properties to Eldorado’s lineup:

Tropicana Laughlin Hotel and Casino (Nevada)
MontBleu Casino Resort & Spa (Nevada)
Tropicana Evansville (Indiana)
Belle of Baton Rouge Casino & Hotel (Louisiana)
Trop Casino Greenville (Mississippi)
Lumière Place (Missouri)
Tropicana Casino and Resort (New Jersey)

Eldorado’s President and Chief Financial Officer, Tom Reeg, added:

With the acquisition of seven Tropicana properties, Eldorado enters two new gaming jurisdictions and adds financial and geographic diversity to our operating base. We have identified $40 million of synergies that we expect to realize over the next year. We believe the financing structure for the transaction, which includes a master lease of real estate acquired by GLPI, allows us to maintain financial flexibility for leverage reduction and continued transactional growth as we continue to own the majority of the underlying real estate across our remaining property portfolio.

Those two new states are Missouri and Indiana. Eldorado likely isn’t a household name and no, it doesn’t own the ridiculous properties that competitors like MGM and Caesars do, but it is a very well-established gaming company in the U.S. Prior to the Tropicana acquisition (and the Tropicana in Atlantic City is clearly the headliner property), it operated the Isle, Lady Luck, and Eldorado brands, as well as Circus Circus in Reno.

As mentioned, Tropicana was owned by Icahn Enterprises, controlled by notorious real estate billionaire Carl Icahn. Icahn took over Tropicana in 2010 when the company faced bankruptcy, similar to how he acquired the former Trump Taj Mahal in Atlantic City. He was the largest debtholder of Trump Entertainment Resorts when the company entered bankruptcy in 2014. When it came out of bankruptcy in 2016, Icahn took control of the Taj. After a mean-spirited dispute with the state, city, and union, he shutdown the Taj later in 2016 and sold it to Hard Rock International in 2017.

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