As the Eldorado Caesars acquisition creates the largest casino brand in the United States, the gambling industry in Indiana will be affected. The question is, exactly how?
The most likely scenario is the potential investment in Caesars’ five Hoosier State properties. The new ownership might also lead to increased interest in the Indiana legal sports betting market as well.
Details on the Eldorado Caesars acquisition for Indiana
Last week shareholders for both companies approved the merger, which is really Eldorado Resorts acquiring all of the shares of Caesars Entertainment and re-branding the company under the Caesars name. The new joint company operates five properties in the Hoosier State:
- Hoosier Park Racing & Casino
- Horseshoe Hammond Casino
- Horseshoe Southern Indiana Hotel & Casino
- Indiana Grand Racing & Casino
- Tropicana Evansville
Caesars costs about $17.3 billion for Eldorado to absorb, about $7.2 billion of which was a cash transaction for over 77 million shares. The rest of the valuation is the assumption of outstanding debt.
Not only does this make the new Caesars the dominant casino brand in the Hoosier State but the US as well. Caesars’ portfolio now includes more than 60 properties in 16 states.
While the acquisition cost was significant, there are real advantages to the consolidation of resources. Pooling resources like marketing capital could prove pivotal for Caesars’ interests in the Hoosier State going forward.
Why Caesars needs to spend money to make money
The casino industry is at its most basic level an entertainment industry. Not only do casinos compete with each other, but also with sporting events and even at-home video options like Netflix for consumers’ limited entertainment dollars. Because of that, the industry relies on marketing.
Reaching consumers requires a lot of capital. It’s typically one of the largest expenses for gaming operators every year, ranging from fliers to television commercials to promotional programs.
Like advertising for any other industry, the properties that can reach the most people usually win out. Therefore, the companies that have the biggest marketing budgets enjoy significant advantages.
That’s why pooling the resources that both companies were formerly spending individually is a big benefit of the merger. It allows Caesars to throw more weight behind successful strategies while not neglecting other markets at the same time.
What Caesars’ investment in Indiana could look like
In Indiana, how Caesars will spend the newfound capital is uncertain right now. It could take the form of renovations at its properties, or new or enriched promotional campaigns.
The big difference between the two is that Caesars club members earn rewards points for every dollar spent on anything at any Caesars property. Eldorado’s One Club only rewarded members for gambling dollars.
While that’s great news for anyone who frequents the Tropicana, there might be bigger benefits for all residents of and visitors to the Hoosier State. This merger could have an effect on legal sports betting in Indiana as well.
How the merger might boost Indiana sports betting market
Two key components of a robust legal sports betting market are consumer choice and convenience. The competition puts pressure on operators to offer better promotions, and convenience enhances the chances that people will place wagers.
Indiana is doing well for the most part on both of those fronts. There is a great selection as far as brick-and-mortar sportsbooks go, and online sportsbooks are also operating in the state.
Where the Hoosier State is lacking right now, however, is a selection of mobile operators. Currently only BetRivers, DraftKings and FanDuel accept online wagers in Indiana. This merger might change that situation.
Caesars already has a Hoosier State market access deal in place for mobile betting with Scientific Games Inc. Right now, there is no timeline for when that product will launch in Indiana. BetIndiana and PointsBet appear to be the next two online books to market.
The infusion of capital might grease the wheels in this situation for Caesars and Scientific Games. The sooner the product launches, the more likely it is that it will grab a share of the still-developing market.
While this acquisition definitely ensures Caesars’ properties in the Hoosier State will continue to operate for the indefinite future, it could mean a lot more than just keeping the doors open. It could mean new looks for the casinos and some new mobile sportsbook options in Indiana as well.