The casino landscape in Indiana will be changing before the end of 2020.
Caesars Entertainment has to sell a trio of locations before year’s end. Caesars Southern Indiana, Tropicana Evansville and Horseshoe Hammond will all be in new hands soon.
The sales are a result of the company’s recent merger with Eldorado.
The Indiana Gaming Commission (IGC) agreed to approve the merger, but only if Caesars sold three casinos in the state.
Basically, the commission wanted to avoid an Indiana casino monopoly. Without selling any properties, Caesars would have controlled about 60% of the state’s casino market post-merger.
The company had already offered to sell two different casinos, which would have dropped that number down to about 40%.
The IGC didn’t think that went far enough.
The commission is forcing Caesars to sell a third casino, but the question is, who’s going to buy the three of them?
The sales have to be complete by Dec. 31, 2020, so the clock is ticking.
Will Churchill Downs buy Caesars Southern Indiana?
Ever since Caesars Southern Indiana opened in 1998, it’s been a thorn in Churchill Downs’ side.
Since the casino is right across the Ohio River from Louisville, it’s always attracted tons of Kentucky gamblers from the city.
Specifically, the casino has funneled customers away from the racetrack, and over to the newer casino for a full slate of gambling options.
That never sat well with Churchill Downs.
In order to compete, the company pumped $65 million into Derby City Gaming, which opened on the Kentucky side of the border in 2018.
The move was successful in keeping a lot of those Bluegrass State bettors from crossing the river.
Caesars countered by moving the riverboat into a brand-new $90 million land-based casino, hoping to win back the customers that it had lost.
Overall, the back-and-forth is getting expensive for both sides, and it could very well continue into the future.
Churchill Downs could put a stop to the tug of war by buying Caesars Southern. The move would make the company the undisputed gambling authority in the Louisville area.
However, the company might find itself tired of spending. With so much defensive money already spent on the Kentucky side of the border, it’s possible that Churchill Downs could end up getting cold feet due to those prior commitments.
Tropicana Evansville and Boyd Gaming
Boyd Gaming’s strategy in Indiana has been based around well-placed casinos.
The company likes to draw in customers from multiple states at the same time, and it’s been successful doing that so far.
Michigan City’s Blue Chip Casino is a short drive away from the Michigan border. That proximity brings in a ton of gamblers from Indiana’s northern neighbor.
The casino is also less than an hour’s drive away from Chicago, so it gets the best of both worlds. With Hoosiers, Chicago residents and Michigan visitors all coming in for business, Blue Chip is right in the middle of a border hot spot.
Belterra, Boyd’s other Indiana casino, is in a similar situation.
The casino is right next to Cincinnati, giving it great access to the city’s customers. Although there isn’t much across the river on the Kentucky side of the border, the location is still solid since it’s next to a major city.
If Boyd Gaming bought Tropicana Evansville, it would continue its trend of pitching camp near big areas in other states.
Owensboro and Henderson, two of Kentucky’s largest cities, are right across the Ohio River. Evansville is also the third-largest city in Indiana, so there’s already a nice base of Hoosier gamblers right at home.
The move might seem like a no-brainer given the company’s previous purchases, but right now it’s hardly a done deal.
Boyd has taken some hits during the coronavirus pandemic. Its losses over the past few months are forcing the company to lay off a big chunk of its staff.
With this being a down year, Boyd might not be so eager to jump at a new buy. However, if the company is looking for a future-focused move, a marriage with Tropicana Evansville would make sense for both sides.
MGM returning to Chicago area?
MGM Resorts could make its return to the Chicago area by purchasing Horseshoe Hammond.
The company used to own the Grand Victoria Casino, which is a little west of Chicago.
It’s a smaller riverboat casino that features just over 1,000 slot machines, along with some table games.
MGM sold the casino to Eldorado back in 2018 for $327 million.
Horseshoe Hammond would make a lot of sense for MGM, since it likes to back the proven horse.
The company owns large, successful casinos near big markets like:
- the Las Vegas strip
- Atlantic City
- Washington, DC
- New Orleans
Given that Chicago is one of the biggest cities in the country, a return to the area would make sense for MGM.
Horseshoe Hammond would be a great buy for MGM
So why would the company return to the area just a few years after getting out?
To start, Grand Victoria didn’t really fit with MGM’s portfolio to begin with.
Even though it’s nearby Chicago, there are still a handful of closer options to the downtown area. Residents are less willing to make the 50-minute drive out to Grand Victoria when they can gamble at casinos that are closer to them.
Being the third or fourth option in the area doesn’t really fit MGM’s standards.
Horseshoe Hammond would give the company a chance to jump to the front of the line.
As the most profitable retail casino in the state of Indiana, it’s already a proven power player in the Chicagoland area.
The casino is a 25-minute drive from the heart of the downtown area, and already pulls in tons of customers from the Illinois side of the border.
With over 3,000 slot machines compared to Grand Victoria’s 1,100, Horseshoe Hammond is also huge in comparison.
Its size and proven profitability may be enough to get MGM interested in purchasing it.
Regardless of who ends up buying the three casinos from Caesars, things will have to get moving over the next few months. With the Dec. 31 deadline on the horizon, Caesars will have its hands full trying to offload its Indiana positions.