Caesars Buying Two Indiana Racinos
In its first big move since its largest operating division emerged from bankruptcy reorganization last month, Caesars Entertainment has agreed to pay $1.7 billion in cash to buy two Indianapolis-area racinos.
The deal will see the Las Vegas-based gaming giant acquire Centaur Gaming and its Hoosier Park and Indiana Grand racetracks and their 4,000 machine games and electronic table game positions, plus three off-track betting parlors.
Centaur also owns the land under the tracks, leading to speculation that Caesars’ newly spun-off VICI Properties REIT could be a partner in the acquisition and could end up owning both properties.
Another plus is that the tracks could be eligible for live table games in 2021, according to a Bloomberg report cited by SunTrust Robinson analyst Patrick Scholes.
Macquarie gaming analyst Chad Beynon said the addition of live tables could boost EBITDA at the racinos a combined $15 million to $25 million a year. The two posted $400.7 million in combined slot revenue in 2016. Beynon estimated trailing 12-month EBITDA on that at an aggregate $120 million-$150 million.
Caesars already owns two of Indiana’s 13 casinos, the Horseshoe Hammond and Horseshoe Southern Indiana in Elizabeth, and Indianapolis could prove a valuable third feeder market for the company’s Las Vegas resorts. The city currently is connected to Las Vegas by three direct flights daily.
“We believe Centaur Gaming and Caesars Entertainment will be a great combination,” said Caesars President and CEO Mark Frissora.
Centaur Chairman and CEO Rod Ratcliff said the merger “will further build on the successes and contributions of the properties for the benefit of our customers, team members, horsemen, community partners and financial stakeholders.”
The transaction, which requires approvals from the Indiana Gaming and Racing commissions, is expected to close in the first half of 2018.