This week started off with some major news for the US casino market, as Carl Icahn announced he has entered into a definitive agreement to sell Tropicana Entertainment to Eldorado Resorts for $1.85 billion.
The sale includes the following Tropicana properties:
An eighth casino in Aruba, “will be disposed of as a condition to closing,” according to the press release.
“The acquisition of seven Tropicana Entertainment properties will allow Eldorado to enter two new gaming jurisdictions and deliver additional financial and geographic diversity to our operating base,” said company chairman and CEO Gary Carano. “Eldorado Resorts intends to implement our proven strategy of enhancing margins by further improving customer service and the customer experience while focusing on promotion and other spending in all areas of the newly acquired properties.”
Eldorado is already a major player in the US casino industry, but flies under the radar due to its previous focus on smaller, regional casinos. With the addition of Tropicana Entertainment’s seven casino properties, Eldorado Resorts will operate more than two dozen casinos in 12 states, and has added a few larger properties to its portfolio.
In addition to increasing its land-based casino footprint, the sale turns Eldorado Resorts into a key participant in the burgeoning US online casino industry.
Eldorado’s assets include casinos in three of the four online gambling states:
As well as in three states that have flirted with online legalization:
Eldorado might be well positioned, but what we don’t know is how will Eldorado will approach online gambling.
Among the unanswered questions are:
It’s also now in three states with sports betting laws on the books.
One scenario that makes sense would see Eldorado maintain the status quo at Tropicana in Atlantic City and utilize two platform providers in Pennsylvania, one for casino and one for poker.
When the sale is completed, Eldorado will assume control of Tropicana AC’s existing online casino site. The site is currently powered by Gamesys, and even though it ranks towards the bottom in terms of online casino revenue, it’s competitive in the market and a solid all-around online casino platform.
As such, Eldorado could:
Considering how crowded the market already is, I’m not sure there would be enough of a benefit for Tropicana AC to launch an online poker site in New Jersey at this point in time.
Further, Lady Luck is an also-ran in the Pennsylvania land-based casino industry. As such it makes sense to partner with a platform provider that is capable of being the headliner on a marquee, like PokerStars.
In that scenario, PokerStars could share online poker players between Lady Luck/PokerStars in Pennsylvania and Resorts/PokerStars in New Jersey.
If that’s the case, it’s unlikely Eldorado would launch an online poker site in Nevada, a state where PokerStars has been deemed persona non grata.
The above is just one scenario.
If Eldorado has intentions to launch in Nevada, I’d expect them to partner with a different online poker provider. Regardless who it is — 888 Poker, PartyPoker or Pala Poker — it creates a whole host of interesting possibilities.
And of course, there is always the option to remain online-casino-only and choose Gamesys or another platform in Pennsylvania.