On July 17, 2020, the Casino Control Commission finally gave its long-awaited official stamp of approval to the $17.3 billion Caesars Entertainment Corp.– Eldorado Resorts, Inc. merger.
It was the only step remaining for Eldorado’s acquisition of Caesars to become a done deal. On the next business day, Mon., July 20, the merger of the two companies became final.
While Eldorado senior management now assumes charge of operations, it will keep the more familiar Caesars brand name intact. Caesars won’t change its name to Eldorado. Instead, the newly created company will be called Caesars Entertainment Inc.
See my July 21 article for NJ Online Casino entitled “Caesars-Eldorado Merget Gets Casino Control Commission Approval” for the complete story.
Which AC casino properties now belong to the new Caesars Entertainment?
Prior to the merger, the old Caesars Entertainment Corp. owned three Atlantic City casino hotels—Caesars, Harrah’s, and Bally’s while Eldorado owned just one—Atlantic City Tropicana. Currently, all four properties fall under the new Caesars Entertainment Inc. umbrella.
However, if the pending sale of Bally’s Atlantic City to Twin River goes through, that will change. Bally’s (except for the Wild Wild West and the sportsbook there, which Caesars will keep regardless) will cease to be part of Caesars.
Meanwhile, the Caesars Rewards program will continue to operate as before–but with one welcome addition. Tropicana is now a Caesars Rewards casino, too!
Therefore, if you hold a Tropicana Advantage card, you should still use it when you visit Tropicana Atlantic City. But if you haven’t already linked your Tropicana rewards to your Caesars rewards, be sure to do so as soon as possible.
That way all of the Reward Credits and Tier Credits you earn at any of the four AC Caesars Entertainment properties get combined. So you can qualify for more benefits and rewards much faster.
Also, the free Caesars Rewards shuttle now includes the Tropicana as one of its stops.
What kinds of improvements will Caesars Entertainment make at its Atlantic City properties?
The Casino ControlCommission’s agreement to the merger included a long list of conditions. Among them, the newly formed company needed to commit to making a sizable investment in its Atlantic City properties over the next 36 months a top priority.
Accordingly, Caesars Entertainment Inc. has agreed to spend $400 million over the next 36 months on upgrades to three of its four current Atlantic City casino property holdings: Caesars, Harrah’s, and Tropicana.
At least $150 of this money will go towards hotel renovations, gaming upgrades, and new food and entertainment offerings at Caesars Atlantic City. It is the oldest of the Caesars AC properties, debuting in June 1979, and the second oldest still-standing casino property in town.
However, none of these casino hotels are new. Bally’s opened in December 1979, followed by Harrah’s in 1980, and Tropicana in 1981.
No renovations will occur at Bally’s for now, in anticipation of the sale to Twin River Worldwide Holdings. But if the sale doesn’t materialize, Caesars will earmark an additional $125 million for upgrades at Bally’s.
The Caesars upgrades are long overdue
According to an Aug. 5, 2020 article on The Press of Atlantic City.com, the NJ Division of Gaming Enforcement (DGE) was troubled by Caesars’ unimpressive spending record on capital improvements at both Caesars and Bally’s over the years.
Prior to the Caesars-Eldorado merger being approved, DGE regulators sent a report to the Casino Control Commission delineating their concerns. That report strongly influenced the Commission’s insistence on a firm commitment from Caesars to correct this shortcoming as quickly as possible.
The report stated that even the two smallest Atlantic City casinos–Golden Nugget Atlantic City and Resorts Casino Hotel—had spent more on capital reinvestments than Caesars and Bally’s.
And in 2018, when the dual opening of two new casinos—Hard Rock Hotel & Casino Atlantic City and Ocean Casino Resort–brought the total back up to nine, capital spending at Caesars and Bally’s had further decreased.
Moreover, according to the DGE report, the problem wasn’t just a recent trend. NJ gaming regulators held senior management at these casinos directly responsible for the consistently inadequate investment in capital improvements at these two Caesars properties dating all the way back to 2008
Caesars Entertainment Inc. Chief Financial Officer Bret Yunker acknowledged that the prior company should have done better. According to Yunker,
“The old Caesars went through a very tough period where they had a hard time investing in, honestly, all of their assets. Once they got out of bankruptcy (in 2015), they really were focused on Vegas and a handful of targeted regional markets, but, unfortunately, Atlantic City got the short end of the stick there.”
However, Yunker convinced the Commission and the DGE that going forward, the new Caesars would make capital investment in Atlantic City a significant part of the new Caesars marketing strategy.
Why continued major capital investments on the part of Atlantic City casinos are important
Like any other business, casinos need to keep up with the times. They need to be aware of the kinds of amenities that will attract more visitors and players, and try to deliver them insofar as possible. Some of what worked in the past might not work as well today and in the future. In any case, people get tired of the same old and welcome opportunities to try something new.
Jane Bokunewicz, coordinator of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton University, therefore expressed optimism about the impact of Caesars’ commitment to spend at least $400 million on capital improvements.
Bokunewicz believes that by committing to extensive capital investments, Caesars can greatly increase its appeal to both repeat and first-time visitors to Atlantic City. Here is what she had to say on the subject:
“Any time there’s a new restaurant people want to go to it, or a new design of the hotel rooms people want to stay in those rooms. Investment in the property definitely leads to customers wanting to come visit the property to see what’s new. … So depending on how creative they get with their investments, it could be something spectacular that would attract people to the market.”
Tropicana Atlantic City can even serve as a model for the other AC casino properties to follow
Bokunewicz worked for over a decade at Tropicana. During that time, she got to see firsthand how the right kind of capital investment can do wonders for an aging property.
The completion of the retail, dining, and entertainment area known as The Quarter in 2004 produced a very quick return on the casino’s $280 million investment. Customers flocked to the property in droves.
Bokunewicz feels that the results of the upcoming investments by the new Caesars will also be positive. She bases her projection on the premise that “the [Caesars] brand is strong, [and] they have the best location in Atlantic City. So they have a unique opportunity.”
Yunker likewise cited Tropicana’s success with the Quarter as a “template” on how to achieve much-needed improvements that will make all of Caesars’ Atlantic City properties more attractive destinations.
“[The Quarter] really repositioned [Tropicana] as a true destination for, not just your day-tripper, but people coming from a broad swath of the East Coast,” Yunker pointed out. “I think there’s a huge opportunity for us on the East Coast to drive business to Atlantic City.”
Summary and conclusion
It’s much too soon to know what impact the upcoming enhancements at the various Caesars properties in Atlantic City will have.
But if one of the outcomes of the Caesars-Eldorado merger is that it finally gives the patrons of these properties the high caliber experience they have come to expect from the renowned Caesars brand, what is not to like? It has to be good for the future of Atlantic City.