Eldorado Resorts which is based out of Reno recently announced that it has agreed to sell two of its regional gaming properties. The beneficiary of this sale is going to be racetrack operator Churchill Downs. This will be done in separate deals and the total sale value is expected to be around $229.5 million.
Sale Will Boost Company Finances
Eldorado has agreed to sell its Presque Isle Downs & Casino and Lady Luck Casino to Churchill Downs. Presque is a racetrack property in Erie, Pennsylvania and will be sold for $178.9 million. Lady Luck Casino is located in Vicksburg, Mississippi and will have a price tag of $50.6 million. The deals are not final though since both are pending subject to regulatory approval. They are expected to push through by late 2018 and give Eldorado a big financial boost.
In a statement, Gary Carano, Chairman and Chief Executive Officer of Eldorado said:
“Our agreements to divest Presque Isle and Lady Luck Vicksburg are consistent with our strategy to maximize returns from our portfolio of regional gaming assets through investments in new properties as well as opportunistic divestitures. The sale price represents an attractive multiple of these properties’ trailing twelve months cash flows.”
Eldorado To Invest In Makeovers
The main reason for the sales is a shift in strategies. With this sale, Eldorado will be able to reinvest into its remaining 18 casinos which are spread across ten states. This move is a good one for the company as it allows Eldorado to cut some of the dead wood away. In 2017, the company spent $1.7 billion to buy Isle of Capri – which was one of their gaming rivals. This acquisition added 12 casino resorts to the company’s portfolio. One of the additions was the Lady Luck Casino. With its sale, the company can focus on further optimizing its remaining properties. Besides its properties in Nevada, Eldorado wants to focus on its holdings in Colorado. It currently has two casinos in the state that need some attention.
Carano reported Eldorado’s quarterly earnings in Feb and said that company will now be focusing on its three flagship resorts. These casinos are the ones it has in in Reno which are the Eldorado, the Silver Legacy and the Circus Circus. Eldorado recently upgraded these casinos and close to a thousand hotel rooms and suites in these locations received makeovers. The company also invested in redesigning and upgrading eight restaurants, cafes and bars while creating new public spaces in them. Eldorado also opened the doors on a new poker room and sports book.