News of a deal to acquire Caesars Entertainment is sparking questions about how the move will change the gaming landscape in Las Vegas.
The company is being acquired for nearly $6 billion by Fertitta Entertainment in a deal that gives Fertitta control of a sizeable share of the Las Vegas Strip and other gaming and leisure properties nationwide.
Howard Stutz, senior reporter for the Nevada Independent, has spent decades covering the Nevada gaming industry.
I spoke with Stutz on Thursday to get his insight into how this deal may play out and what it means for locals and tourists alike:
[EXTENDED INTERVIEW] How will a deal to acquire Caesars Entertainment affect the Las Vegas gaming landscape?
ABEL GARCIA: So, just explain to us, why is this such a big deal?
HOWARD STUTZ: Well, that’s amazing about it is Tilman Fertitta is privately held, you know, he has a privately held company called Fertitta Entertainment. He owns, like 600 different businesses…He bought the Golden Nugget several years ago, in Las Vegas and Laughlin, and he’d expanded that brand a lot over the last few years…He also owns the Houston Rockets. I think he’s also just recently acquired the Connecticut Sun, the WNBA team. It’s a big deal, and it’ll be fascinating to see, because its going to be a big company, how many of these casinos will they have to part with? You know, there’s federal antitrust issues. You can’t have a monopoly. And, look at Lake Tahoe — there’s four major casinos in Lake Tahoe, and they will own three of them. So, there’s some questiuons here that it’s going to take a while for this to sort out. It’s not going to be answered tomorrow.
GARCIA: I think a lot of people are questioning, you know, what will it mean for those who do work in hospitality, specifically under Caesars’ umbrella. What can we say about what so far?
STUTZ: Well, what we know is…when they announced it this morning, they said that current Caesars’ management team, CEO Tom Reed and the top executives, that’s not going to change. They will basically be operating the division, Caesars Entertainment, will be a division of Fertitta Entertainment, and they will be in charge of it. So, in reality, that really shouldn’t change. That change will be what happens with some of the properties? Laughlin’s another example — there’ll be three properties controlled by Fertitta Entertainment — two operated by Caesars and one operated by Fertitta, Golden Nugget. SO, what happens down there? There’s a lot of questions that will be ironed out over the next — this is probably going to take like, a year to finalize, you know, because you have to go through all the regulatory approvals in as many states as Caesars and Golden Nugget operate in. This also puts Fertitta Entertainment back into the sports betting business…and one of the challenges is that because Tilman Fertitta owns the Houston Rockets, you can’t bet on the Houston Rockets in the sportsbooks at any of the Golden Nugget casinos, at least in Nevada… So, that may become an issue here at some point.
GARCIA: I think we’ve been seeing a little bit of uncertainty when it comes to Caesars in the past couple of years…It seems like they were struggling financially, maybe, as is. Do you think that’s maybe what happened, that they were already having these discussions, and they said, you know, before we hit rock bottom, let’s just go ahead and try to find somebody else who can buy us out?
STUTZ: Maybe that’s part of it. Caesars was also carrying about almost $12 billion in debt. So, Fertitta is picking that up, and he has, there’s like 10 different banks, they’ve said in the press release that they’re involved in this, you know, to help finance it. So it will, that will eventually go away, so that could be part of it. And the fact is now, though, they’re leaving the Caesars team in to operate it. You know, they’ve got amazing restaurants. They’re opening the Vanderpump Hotel in a couple of weeks… You know, they’re just going to operate as usual and we’ll see where all of this goes, if stuff has to pair off or how this will happen. But it’s early, so it’s too early to tell what will take place with it. But it is a fascinating deal, you know, for the gaming industry, because it’s nationwide. It’s not just Vegas, it’s everywhere.
GARCIA: And with your experience and with your knowledge of our city, do you think that this will be positive or negative for the City of Las Vegas moving forward?
STUTZ: It’s just Las Vegas moving forward. I think Caesars will be able to operate…they’re just going to move forward and operate. That’s what they do…I’ve been here a long time. I’ve seen a lot of changeover in properties and management. This one’s kind of stunning to see Tilman Fertitta come in. You also remember, Tilman Fertitta is the largest shareholder in Wynn Resorts. That’s a question of what’s he going to do with that. He also has a site here on the Strip, kind of off Harmon (Avenue) on the Strip; there’s a small, little acreage that he just wanted to build a 2,400-room hotel tower going straight up. We don’t know where that’s going to stand. So, there’s a lot of things that we’re still going to see shake out over this, but it’ll be fascinating to see how it all comes through.
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