The gambling industry has seen a huge rise in casino mergers and acquisitions over the last decade. The increased consolidation among casino operators all over the world has increased largely due to the slow organic growth that has been experienced in the past couple of years. Mergers and acquisitions (M&A) have allowed casino operators to compensate for the slow growth, enabling them to remain in business for much longer.

In once-popular gambling hubs such as Vegas and Macau, organic growth is not as strong as it previously was. As a result, for casinos to find growth, they are forced to either buy another casino group out or consolidate with one another in the shape of merges or even hostile takeovers to generate the sales and growth needed to advance.

Mergers often result in an increase in size and scale that goes a long way in benefiting the casino’s bottom line. This trend of consolidation has also gone a long way in impacting casino real estate. In poker, the player with the best hand typically wins.

The same case is true when casino operators join forces. Amid mounting competition and increased regulatory pressure in several jurisdictions, the only thing that makes sense for some operators is to merge. So which are the biggest casino mergers? Here are some casino mergers that reshaped the industry:

Eldorado Resorts and Caesars Entertainment Corp.

The consolidation between Eldorado Resorts and Caesars Entertainment Corp. in 2019 is one of today’s biggest mergers yet. Eldorado Resorts conceded to pay US$17.3 billion to obtain the much more superior competitor Caesars Entertainment Corp. which in turn helped to create the largest gambling company by venue count in the U.S.

To acquire the revered and well known Caesars name and properties, Eldorado had to part ways with $7.2 billion in cash and approximately 77 million in stock shares. With this agreement, Eldorado also agreed to assume any of Caesars’ outstanding debts, allowing its shareholders to end up with a 51% stake of the combined company.

This consolidated partnership would utilize Caesars’ brand but all of the top leadership, from the chairman to the CEO, would remain with Eldorado. Before the partnership, Eldorado was already operating 26 gambling establishments located all over from Nevada and Colorado to Louisiana and New Jersey.

With the partnership, Eldorado was able to widen its portfolio, taking control of well-known mainstays such as Harrah’s, Caesars Palace, and Bally’s and 60 other properties strewn in more than 16 states.

Eldorado Resorts and Tropicana Entertainment

In an effort to expand its presence in the newly legalized U.S sports betting market, Eldorado Resorts acquired Tropicana Entertainment in a deal worth approximately $1.85 billion. This agreement helped to extend Eldorado’s reach further across 12 states. Combined, it was estimated that the 2 businesses would be able to generate an estimated annual revenue of more than $2.7 billion.

With this deal, Eldorado Resorts was able to acquire the operating assets of 7 casinos in a total of 6 states including 2 casinos in Nevada, as well as casinos in Indiana, Louisiana, Mississippi, Missouri, as well as New Jersey’s Tropicana Casino and Resort situated in Atlantic City. Owing to this acquisition, Eldorado was able to enter two new gaming jurisdictions as well as add financial and geographical diversity to the group’s operating base.

According to Kate Huber, chief editor at NJGamblingFun, ‘’when casinos merge, they are able to have more resources at their command than they would have, had they opted to remain as individual companies. This goes a long way in helping to increase the scale of operations. Duplicating facilities such as marketing and accounting are also merged, which helps to eradicate operating inefficiencies, thus helping these organizations to keep growing in a competitive but tough market.’’

Penn National Gaming and Pinnacle Entertainment

Penn Gaming entered into an agreement with Pinnacle Entertainment under which Penn National would acquire Pinnacle in cash and stock deal that was valued in the region of $2.8 billion. At the time of the agreement, Pinnacle Entertainment operated 16 gaming and entertainment venues in 11 jurisdictions across the country.

Under the terms of the new agreement, Penn National would have considerably greater operation and geographical diversity. This transaction was expected to generate over $100million in yearly run-rate fee synergies after full integration. The combined companies benefited greatly from the improved scale and bonus expansion opportunities, therefore creating a more competent integrated casino establishment.

William Hill and CG Technology

UK based sports betting conglomerate William Hill agreed to purchase all the sportbook assets of CG Technology, based in Las Vegas in 2019. Before the partnership, CG Technology was one of the biggest licensed bookmakers in Nevada, operating a total of 7 sportsbooks in the state. This partnership gave William Hill the highly sought after opportunity to develop its Vegas footprint even further to include a number of marquee resorts.

With this deal, William Hill was able to not only acquire assets situated in Nevada but the Bahamas as well. In the Bahamas, William Hill was able to assume ownership and operation of CG Tech’s popular betting platform Atlantis.

For CG Tech, this deal was vital in helping the company deal with its regulatory problems. In the years between 2014 and 2018, the Nevada Gaming Commission had fined CG Tech more than $8 million for regulatory violations including a $5.5 million fine in 2014, which to this day still stands as the 2nd highest fine ever assessed in casino gaming history.

William Hill currently the largest sportsbook operators in the world, operating strongly in more than 100 different tracks and sportsbooks. With partnerships such as these, William Hill is slated to keep growing in future.

Final Thoughts

Mergers help to compensate for the slow growth that has characterized the industry in the past few years. Casino operators, especially in the United States, typically have deep pockets and are always on the hunt for more assets. Mergers and acquisitions present them with perfect opportunities to hunt for these assets so that they can compete on a global scale.

Like all businesses, casino operators and establishments face increased competition for more customers. By forming mergers especially with competitors, they can benefit from considerable cost savings that can then be re-invested into technology such as virtual reality and an array of other growth-oriented projects. The result will be better performance and improved service delivery for their customers.

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