Tilman Fertitta, the billionaire owner of the Golden Nugget casinos, has reportedly approached Caesars Entertainment about a possible reverse merger.
The proposal would allow Caesars shareholders to retain positions in the newly formed company. Sources told Reuters that major Caesars shareholders Apollo Global Management LLC and TPG Global have attended the conversations between Caesars management and Fertitta.
At this point, there is no word about how interested Caesars is in the merger. The company’s market capitalization of $6.5 billion exceeds the value of Fertitta’s holdings. However, this difference is not enough to render the deal free of potentially major consequences.
Fertitta’s holdings include numerous restaurants and entertainment venues, collectively held under the Landry’s, Inc. umbrella. He also owns the NBA’s Houston Rockets.
What properties do these two groups have in New Jersey?
Both Fertitta and Caesars have a significant footprint in New Jersey’s gaming scene. They have holdings that are both land-based and online.
Obviously, the most notable asset that Fertitta owns in Atlantic City is the Golden Nugget Atlantic City Hotel, Casino & Marina. He purchased the property from Trump Entertainment Resorts in 2011.
The land-based property does alright, if not spectacularly so, in terms of revenue. Its returns are on the lower end of the Atlantic City group.
Caesars is one of the larger gaming companies in the world. The company owns multiple properties worldwide, including a significant portion of the Las Vegas Strip.
In New Jersey, Caesars has three Atlantic City casinos. Bally’s Atlantic City Hotel & Casino, Harrah’s Resort Atlantic City and Caesars Atlantic City Hotel & Casino all operate under the company’s banner. Both Caesars and Harrah’s operate online casinos as well.
So, between the two organizations, there are four land-based Atlantic City casinos and three online casinos. In all, a merger between the two would create a behemoth.
This combination of assets may also involve extensions of strategic partnerships that either group might have. Notably, Caesars has a relationship with Scientific Games and Golden Nugget a union with SBTech.
Sports betting assets
One interesting tidbit about the Golden Nugget sportsbook pertains to the recently debuted NBA season. Due to Fertitta’s ownership of the Rockets, the Golden Nugget AC sportsbook cannot accept wagers on NBA games.
Of the three Caesars casinos, two of them offer a land-based sportsbook to patrons. Harrah’s and Bally’s (the latter in its Wild Wild West section) both opened sports betting operations around the beginning of September 2018.
Caesars AC chose not to open a land-based book. However, the company’s only online sportsbook is through the Caesars online casino.
The bottom line
Obviously, both parties to this proposed merger have properties in other states. A joint venture between the two would create an even larger conglomerate and expand the reach of both groups.
Whether Caesars will go for it remains to be seen. As it stands, the company might already have its hands full with another NBA team owner – there are already talks that it might buy Cleveland Cavaliers owner Dan Gilbert’s JACK casinos.