$50 million deal
Caesars Entertainment and VICI Properties announced on Wednesday that they have agreed to sell Harrah’s Reno Hotel and Casino an unnamed affiliate of CAI Investments. The sale price is $50 million, with 75 percent going to VICI Properties and 25 percent going to Caesars. Once the transaction is complete, Harrah’s Reno will no longer be a gaming property.
The sale was originally previewed by Howard Stutz at The Nevada Independent on Tuesday, prior to the official announcement. Stutz named the buyer as Reno City Center LLC, a subsidiary of CAI.
Though Caesars operates Harrah’s Reno, VICI Properties is the owner, leasing it back to Caesars. VICI was created in 2017 as part of Caesars’ bankruptcy reorganization. Caesars operates the majority of the casinos owned by the real estate investment trust.
Casino’s days are numbered
Caesars will continue to operate Harrah’s Reno until the sale is closed, expected to occur in the second half of this year. Once it’s done, that’s it. No more Harrah’s Reno, which pre-dates World War II. The property will be converted into a “non-gaming hotel and mixed-use development.”
“Being originally from the Reno/Sparks community, it is with great pride that we are investing in the Reno area by redeveloping this property,” said Christopher Beavor, CEO of CAI Investments, in Wednesday’s press release.
Tony Rodio, CEO of Caesars Entertainment, added:
We recognize the long legacy of Harrah’s in Reno, where the brand began 82 years ago and our role in the community. We are pleased the Buyer is committed to the community and supports the redevelopment of this wonderful asset. We have worked closely with the Buyer to provide a reasonable closure plan that allows our great staff in Reno ample time to secure their next jobs, including priority consideration for relevant openings at our other properties in Nevada, including Lake Tahoe and Las Vegas.
In his report yesterday, Stutz said that gaming analysts believe that the sale of Harrah’s Reno is really a decision made by Eldorado ahead of its merger with Caesars. Eldorado already owns three casinos in the heart of downtown Reno: Circus Circus, Eldorado, and Silver Legacy, a trio called “The Row.” Harrah’s Reno is south of The Row; Eldorado may not want yet another downtown Reno casino.
Analysts also think adding Harrah’s could lead to anti-trust issues for Eldorado, as it would dominate gambling in the city. Might as well get rid of it. Based on the sale price, it clearly wasn’t worth much, anyway.
According to Stutz – and I’ll admit that I didn’t know this – shutting down a casino isn’t just a matter of locking the doors and walking away. One of the most important jobs is to count out all of the casino chips and token and then destroy them. I would happily take one or two as a collector’s item, but I would image that it is to know how many chips are in the casino and that nobody is absconding with a massive chunk of them to cash out at another Harrah’s property. My guess is that a few bucks-worth of chips go missing, it’s not a big deal, but who knows?
The Harrah’s Reno-specific progressive jackpots must be paid out, too.