Horseshoe Hammond is staying in the Caesars Entertainment portfolio.
The Indiana Gaming Commission (IGC) was forcing the company to sell the casino by the end of the year.
However, the IGC reversed course at its June 24 meeting, and now Caesars will be in the Chicago area for years to come.
Caesars stays near Chicago
Originally, Caesars had to sell Horseshoe Hammond because of its merger with Eldorado Resorts last year.
When that merger was taking place, every state that the companies operated in had to give things the green light.
To win Indiana’s approval, Caesars had to agree to sell three of its properties in the Hoosier State.
The IGC had concerns that Caesars would start to develop a monopoly in Indiana’s gambling market.
The company controlled about 60% of the gaming revenue at the time of the merger. Forcing Caesars to sell three casinos would have dropped that number to about 40%.
Caesars can’t find buyer for Horseshoe Hammond
Outside of Hammond, Caesars decided to sell Tropicana Evansville and Caesars Southern Indiana.
Caesars didn’t have as much luck trying to offload Horseshoe Hammond. The company originally had until Dec. 31, 2020 to sell the property.
However, you can’t sell something that no one wants to buy.
Caesars struggled to find an interested buyer, so the IGC gave the company a year extension on that original deadline.
CEO Tom Reeg was quick to point out that the Chicago area’s market has made things difficult.
“Unfortunately the situation surrounding the uncertainty in northern Indiana and the Chicago market has not gotten any clearer. Illinois continues to delay in terms of plans of awarding (casinos) to Chicago and the south suburbs.”
Illinois approved a gaming package back in 2019 that would create six new casinos in the state. The Illinois Gaming Board hasn’t handed out a single license so far.
That’s made companies hesitant to dive in head first on a Hammond purchase. With so much uncertainty on the other side of the border, companies didn’t want to buy a casino that could be facing increased levels of competition in the next few years.
Those struggles led to Caesars asking the IGC to let them keep Horseshoe Hammond.
Some changing circumstances in Indiana could alleviate the IGC’s original monopoly concerns.
Will Caesars dominate Indiana?
The gaming commission voted to let Caesars keep Horseshoe Hammond, but it was not a unanimous decision.
Commissioner Marc Fine argued that the IGC should stick with its original plan to avoid a monopoly.
“I think we acted appropriately. This is an excellent operator. They will do well. They will grow their market. If we don’t act now, what we’re really doing is setting ourselves up for more concentration than we want in the future.”
After the Tropicana and Caesars Southern sales, Caesars now owns three casinos in Indiana.
A big corporation like Caesars could very well grow its market share in the state, but it might not be that simple.
Changing factors for Caesars in Indaina
First, there’s that competition from Illinois. Five years from now, Hammond might not be the asset it is now because of a burgeoning casino market next door.
There’s also a changing market on the Indiana side of the border.
Hard Rock Northern Indiana just opened its doors last month, and its sister casino will be built in Terre Haute before long. Four Winds is also adding table games to its property, which will finally make it a full-fledged casino.
Three new casinos in Indiana changes the numbers game for Caesars.
The IGC wanted no more than a 40% share of the gaming revenue for a single company.
Caesars estimates that these new casinos will drop its market concentration down to nearly 30%.
So, even if the company grows its market share like Fine suggested, there could still be a 10% buffer zone before Caesars hits the IGC’s original level of concern.
Of course, this isn’t an exact science. No one knows for sure what will happen in the long term, so only time well tell how this plays out.
Caesars ultimately got what it wanted, and now the IGC can focus on fixing the Hard Rock Casino situation.