Caesars Palace in Las Vegas is among Caesars Entertainment's properties.
Photo: Joe Buglewicz/Bloomberg NewsAn $8.58 billion cash-and-stock merger of Eldorado Resorts Inc. ERI -0.12% and Caesars Entertainment Corp. CZR -0.08% closed Monday, forging the largest casino operator in the U.S. amid uncertainty across the industry over the continuing spread of Covid-19.
The deal creating Caesars Entertainment Inc. also includes about $8.8 billion worth of the original Caesars’ debt, which is being assumed by the combined entity. The combined company has more than 50 casinos in 16 U.S. states, leading the industry, in addition to locations in Dubai, England and South Africa.
Casinos across the U.S., including the entire Las Vegas Strip, closed down starting in mid-March in response to the pandemic. Many casinos have since reopened but with casino floors operating at reduced capacities and masks required on casino floors. Uncertainty looms about when big entertainment events and conferences will return.
The chief executive of the new Caesars, Tom Reeg, who led Eldorado Resorts, said in an interview that reopened casinos have exceeded expectations, and the company’s balance sheet has been built to withstand another industry shutdown.
“Of course we’re concerned with the public-health situation throughout the country,” Mr. Reeg said Sunday. “It would not surprise us if there were certain areas in the portfolio that might need to close for periods of time, but we’re not anticipating a systemwide closure again.”
Thomas Reeg led Eldorado Resorts before becoming the new Caesars’ chief executive.
Photo: Wayne Parry/Associated PressAhead of the deal’s closing, Caesars Entertainment Corp. released preliminary results through June 30 for its casinos that began to reopen in May. Regional casinos that rely on visitors who arrive by car rather than by airplane saw an increase of about 9% to 11% in revenue compared with the same period a year earlier, according to the filing, while nine casinos in Nevada and New Orleans—destination properties that rely more on air travel for visitors—reported revenue declines of 43% to 45%.
In the near term, Mr. Reeg said, the company will consider a spinoff of its sports-betting and online-gambling business to get more value out of what is a growth segment.
The CEO also said Caesars will move forward with a previously announced plan to sell a not-yet-determined Las Vegas Strip casino, with the goal of reaching an agreement in the next 12 months. Such properties include Harrah’s, Planet Hollywood and the flagship Caesars Palace.
The Caesars-Eldorado merger, announced in June 2019, needed approvals from the Federal Trade Commission and state gambling regulators, including a final signoff Friday from New Jersey. Regulators there had expressed concern about how long it would take for pre-shutdown business to return to casinos. Atlantic City, N.J., casinos weren’t allowed to reopen until July 2 and weren’t included in Caesars’ preliminary results.
Before Covid-19, the combined company was set to have 80,000 employees. About 55% of workers have been called back since shutdown orders were lifted in many jurisdictions, and the ability to bring more back will depend on the public-health situation, Mr. Reeg said.
Inside the casino area at Eldorado Resorts in Reno, Nev., on June 4.
Photo: Marcella Corona/Reno Gazette Journal/ReutersActivist investor Carl Icahn, who pushed Caesars to sell, will be the combined company’s largest single shareholder with more than 10%, Mr. Reeg told New Jersey regulators last week.
Write to Katherine Sayre at katherine.sayre@wsj.com
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