{"id":917321,"date":"2026-06-03T12:22:05","date_gmt":"2026-06-03T19:22:05","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/shop\/?p=917321"},"modified":"2026-06-03T12:22:13","modified_gmt":"2026-06-03T19:22:13","slug":"two-empires-fall","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/blog\/two-empires-fall\/","title":{"rendered":"Two Empires Fall"},"content":{"rendered":"\n

First, a programming note.<\/strong> We were on KNPR<\/strong>‘s State of Nevada<\/em> this morning, in tandem with Dr. Michael Green<\/strong> of UNLV<\/strong>, conducting an autopsy of Primm<\/strong> and its three moth-eaten casinos. No punches were pulled nor holds barred. We’ll post a link when the segment goes up on the KNPR website. Now to our main event …<\/p>\n\n\n\n\n\n\n\n

In the space of one week, <\/strong>two empires fell to the barbarians. Well, to billionaires. (Same difference.) First came Caesars Entertainment<\/strong>. Being ambassador to Italy<\/strong> must leave Tilman Fertitta<\/strong> with a lot of time on his hands. Nominally, Mrs. Fertitta is running Fertitta Entertainment<\/strong> … but who are they kidding? It’s Tilman’s way or the highway (we know this from personal experience) and this deal has his fingerprints all over it. <\/p>\n\n\n

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Golden Nugget Atlantic City<\/figcaption><\/figure><\/div>\n\n\n

Basically, in a case of a mouse raping an elephant<\/a>, eight-casino Golden Nugget <\/strong>will absorb 52-casino Caesars<\/a> for $17.6 billion. The price of the deal isn’t that much of shocker. Caesars went private (disastrously) in 2008 for roughly $30 billion. Nowadays, the company’s $12 billion debt burden is a millstone around its neck, depressing the resale value of the company. Two-thirds of Fertitta’s acquisition price is debt assumption. Some of that indebtedness dates all the way back to Gary Loveman<\/strong>‘s blundering ’08 buyout, meaning it’s now old enough to vote.<\/p>\n\n\n\n

Of course, there’s a lot less of Caesars to own nowadays, Loveman and his sucessors having offloaded many of the prize assets to spinoff Vici Properties<\/strong>. That’s Reason #2 for the depressed sale price, only a $2 premium to CZR’s $29\/share price at the time of the deal. Stifel Financial<\/strong> analyst Steven Wieczynski<\/strong> didn’t hide his dismay: “If we were long-time Caesars shareholders \u2026 we would be super irritated.<\/em>” After all, the 6.6X cash-flow multiple of the sale price is below the going rate (7X) for casino properties\u2014and well below the multiple for Las Vegas Strip<\/strong> assets. So you could say that Tilman is getting damaged goods at a substantial discount.<\/p>\n\n\n\n

What Tilman has created is a two-headed monster, as Truist Securities<\/strong> analyst Barry Jonas<\/strong> reports that “The leadership teams of both companies are expected to remain in their current roles to lead the combined companies\u2019 operations<\/em>.” So what happens when Caesars CEO Tom Reeg<\/strong> has a disagreement with his autonomous Golden Nugget counterpart? This could get awkward. If the sale doesn’t go through, Caesars pays Fertitta Entertainment as much as $200 million. Jonas again: “We would however be surprised to see any competing offers come over the top given the amount of time there’s been media speculation around a deal<\/em>.” Indeed, nobody has shown any interest other than Fertitta himself, not even that notorious bargain hunter Carl Icahn<\/strong>. Nope, Uncle Carl is keeping quiet and presumably counting his CZR shares.<\/p>\n\n\n

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Caesars Republic Lake Tahoe<\/figcaption><\/figure><\/div>\n\n\n

The deal has to close by June 26 of next year or Tilman starts to collect a “ticking fee,” compounded daily. Regulatory hurdles will include trying to justify controlling four middling casinos now in Atlantic City<\/strong>. With that city’s Golden Nugget circling the drain, surely it will be palmed off or closed outright. The other three are leased and can’t be sold. Nevada<\/strong> regulators are fairly supine, so an impending four-casino concentration<\/a> on Lake Tahoe<\/strong> might get waved through. Ditto the three-casino bloc in Laughlin<\/strong>. <\/p>\n\n\n\n

But Lake Charles, Louisiana<\/strong> will be problematic, as Golden Nugget has one of the two top casinos in the market (out of four) and Horseshoe Lake Charles<\/strong> has a stranglehold on last place. Potential asset divestitures should (except on the Boardwalk) represent nice pickup opportunities for smaller companies. Penn Entertainment<\/strong>, Boyd Gaming<\/strong> and Churchill Downs<\/strong> have all been mooted as potential buyers. Our favorite is Monarch Casinos<\/strong>, should it leave its two-property comfort zone, and we don’t think Full House Resorts<\/strong> is out of the discussion.<\/p>\n\n\n\n

Practically the biggest unanswered question is whether Tilman will have the stomach for Caesars’ iGaming and OSB branches, particularly straggling Caesars Sportbook<\/strong>. Golden Nugget already got out of the online business once and might do so again. Caesars Rewards<\/strong> was already the most puissant of customer-loyalty programs and now it will Golden Nugget customers folded into it. And, to cite Jonas one last time, “The combined entity will offer a large, diversified offering to customers including 60 domestic casino resorts, … retail sports betting at over 200 third-party locations (through the William Hill <\/strong>brand) and over 550 Fertitta Entertainment outlets including over 450 Landry\u2019s<\/strong> restaurants.<\/em>” (If lease restaurant space in a Caesars property, you might want to start looking nervously over your shoulder at Landry’s.)<\/p>\n\n\n\n

That sounds like a good formula for monetizing the deal. Of course, Fertitta still owns $1.3 billion in Wynn Resorts<\/strong> shares, so he may not be done empire-building. Caesars’ relative lack of high-end exposure could be used to rationalize a Wynn absorption, should Tilman be so inclined. Whatever happens, he’s sitting on a parcel of vacant Strip land, so he might be pulling the trigger on a new megaresort, too. We put nothing past Mr. Ambassador at this point.<\/p>\n\n\n

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The other shoe fell<\/strong> over the weekend, as mogul (and MGM board member) Barry Diller<\/strong> made an $18 billion play for the 74% of MGM Resorts International<\/strong> that he doesn’t own. Ever since the Great Pandemic<\/strong>, Diller’s IAC<\/strong> has been gobbling up positions in MGM stock, starting with a 12% chomp in August 2020. Given Diller’s existing MGM stock holdings, he’s in an excellent spot to block any rival bid … and none has emerged so far. Already, rumors are circling that a Diller-flavored MGM would sell MGM Osaka<\/strong>, still lumbering toward a 2030 debut, as well as the company’s holdings in Macao<\/strong>. That would radical and probably counterproductive action. However, there are few redundancies in MGM’s domestic portfolio, if any, so Diller would have few assets readily for sale.<\/p>\n\n\n\n

Also, Diller is getting MGM at a steep discount: 5.5X cash flow, unless the $48.30\/share asking price goes higher. His stated intent is to keep current management in place and we see no reason to quibble, as much as we have soured on CEO Bill Hornbuckle<\/strong> lately. People Inc. <\/strong>(aka IAC) doesn’t have any casino experience, so let Hornbuckle do the driving. Hopefully, the latter can persuade Diller to hang onto BetMGM<\/strong>, now that it is finally profitable. There’s not as much to be said (yet) about the MGM takeover bid\u2014other than it would make Diller the most powerful gay man in Big Gaming\u2014because the shape of the acquisition is still somewhat nebulous. But we promise to keep an eye on it.<\/p>\n","protected":false},"excerpt":{"rendered":"

First, a programming note. We were on KNPR‘s State of Nevada this morning, in tandem with Dr. Michael Green of UNLV, conducting an autopsy of Primm and its three moth-eaten casinos. No punches were pulled nor holds barred. We’ll post a link when the segment goes up on the KNPR website. Now to our main […]<\/p>\n","protected":false},"author":83928,"featured_media":845342,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[1728],"tags":[],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.lasvegasadvisor.com\/shop\/wp-content\/uploads\/2023\/11\/Caesars-dark-scaled.jpg?fit=2560%2C1920&ssl=1","_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/917321"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/users\/83928"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/comments?post=917321"}],"version-history":[{"count":2,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/917321\/revisions"}],"predecessor-version":[{"id":917334,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/917321\/revisions\/917334"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/media\/845342"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/media?parent=917321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/categories?post=917321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/tags?post=917321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}