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Caesars interest in Gold Coast casino thwarted

Mon, Jul 1, 10:53am by Staff Writer

One of Las Vegas’ biggest casino brands reportedly decided several weeks ago that it would not move forward with trying to win a casino licence in Australia.

Casino.org is reporting that Caesars, which had been eyeing Australia’s Gold Coast as a possible destination in its international expansion plans, has opted against contesting for the licence in the Queensland city.

Some reports indicate Caesars did not give a reason for scuttling its Australia overture and while the decision was made weeks before the Eldorado offer became official, several factors are known about Eldorado’s interest in the operator of Flamingo and Bally’s.

Last week, Eldorado acquired Caesars Entertainment Corp for $8.58 billion, with one of Nevada’s underdogs becoming the largest owner of casino’s in the United States.

Caesars shareholders will receive about $12.75 a share, including $8.40 in cash, a 28 per cent premium to the casino chain’s close last week.

While the combined company will retain the Caesars name, there’s no mistaking who’s buying whom in this transaction: Eldorado with a market value of less than $4 billion, has clinched the giant from Las Vegas and its flagship Caesars Palace.

Eldorado’s interest in Caesars dates back to 2018, with the sides entering into talks about a possible combination in March.

Under the Caesars, Horseshoe and Harrah’s names, among others, Caesars Entertainment operates gaming properties on three continents outside North American, where it has a footprint in more than a dozen US states, as well as Canada.

Eldorado looking at expansion only if its right

While the company does not have a presence in highly profitable markets such as Macau and Singapore, where some of its Vegas rivals do, Caesars has previously mulled other ex-US markets.

At the Brazil Gaming Congress 2019 last week, Caesars Vice President of Governance Relations John Maddox affirmed his company’s interest in an integrated resort in Brazil.

On a call with analysts and investors last week, following the announcement of the big for Caesars, Eldorado CEO Tom Reeg confirmed that the companies will look to sell some properties in markets where both firms currently operate and that sales of some Caesars Las Vegas Strip venues are possible.

Reeg noted that no commitments have been made on expanding outside the United States, adding opportunities to venture into international markets would need to be “stupendous for us to be running in that direction.”

Eldorado management will takeover the day-to-day operations of the combined company when the purchase closes in the first half of 2020.

The Reno-based company runs 26 casinos in 12 states at present.

As for Australia, the Gold Coast still has the Star Entertainment Group’s Star Gold Coast, home to more than 70 table games and more than 1,600 electronic gaming machines.

Australia-based Star Entertainment has already spent $593 million to spruce up that property and has signalled it could put another $1.39 billion into expanding the venue.

Casino operators’ interest in the Gold Coast, a region south of Brisbane, is sensible because the area has a climate comparable to Southern California’s and is a prime tourist spot with destinations including Sea World and several amusement parks.

Home to about half a million people, the Gold Coast is Australia’s sixth-largest city and its population is expected to swell to more than 800,000 by 2035. On an annual basis, tourism adds nearly $3.5 billion to its local economy.


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