Caesars Is Selling Three Indiana Casinos, Who Are The Possible Suitors?

Changes in the casino landscape in Indiana will occur before 2020 ends.

Caesars Entertainment must sell three locations before the end of the year. These include Caesars Southern Indiana, Tropicana Evansville, and Horseshoe Hammond, which will soon have new owners.

The company’s recent merger with Eldorado has resulted in the sales.

The Indiana Gaming Commission (IGC) consented to approve the merger, on the condition that Caesars divest three of its casinos in the state.

Essentially, the commission was striving to prevent a casino monopoly in Indiana by Caesars. If Caesars hadn’t sold any properties, they would have held approximately 60% of the state’s casino market after the merger.

The company had already proposed to sell two different casinos, which would have reduced that number to approximately 40%.

The IGC believed that was not sufficient.

The commission is compelling Caesars to divest a third casino, but the uncertainty remains, who will purchase all three?

The clock is ticking as the sales must be finalized by Dec. 31, 2020.

Is Churchill Downs going to purchase Caesars Southern Indiana?

Since its inception in 1998, Caesars Southern Indiana has been a constant irritant for Churchill Downs.

The casino, being located right across the Ohio River from Louisville, has always been a major attraction for many gamblers from the city of Kentucky.

Specifically, the casino has diverted customers from the racetrack to the newer casino, offering a full range of gambling options.

Churchill Downs never took well to that.

The company invested $65 million in Derby City Gaming to stay competitive. This establishment was launched on the Kentucky border side in 2018.

The strategy effectively prevented many bettors from the Bluegrass State from crossing the river.

In hopes of regaining its lost customers, Caesars responded by transitioning the riverboat into a state-of-the-art, land-based casino worth $90 million.

In general, the ongoing exchange is becoming costly for both parties, and there’s a high possibility it might persist in the future.

By purchasing Caesars Southern, Churchill Downs could end the tug of war and establish itself as the unrivalled gambling authority in the Louisville area.

Nonetheless, the company may grow weary of the ongoing expenditure. Having already invested considerable funds on the defensive side in Kentucky, there’s a chance that Churchill Downs may become hesitant because of those previous commitments.

Boyd Gaming and Tropicana Evansville

Boyd Gaming has based its strategy in Indiana around strategically placed casinos.

The company has been successful in attracting customers from various states simultaneously.

Blue Chip Casino in Michigan City is just a short drive from the Michigan border, attracting a large number of gamblers from its northern neighbor, Indiana.

The casino is situated less than an hour’s drive away from Chicago, enjoying the benefits of both locations. Attracting Hoosiers, Chicago inhabitants and Michigan tourists for business, Blue Chip is perfectly positioned at the heart of a bustling border region.

Belterra, another Indiana casino owned by Boyd, is in a similar situation.

The casino’s proximity to Cincinnati offers excellent access to the city’s clientele. Despite the sparse offerings across the river on the Kentucky side of the border, its location adjacent to a major city guarantees a stable position.

If Boyd Gaming acquired Tropicana Evansville, it would maintain its pattern of establishing a presence near major regions in other states.

Owensboro and Henderson, among the biggest cities in Kentucky, are situated across the Ohio River. Evansville is the third largest city in Indiana, providing a significant base of local Hoosier gamblers.

Although the company’s past acquisitions might make this move seem obvious, it’s currently far from being a guaranteed conclusion.

The coronavirus pandemic has dealt some significant blows to Boyd, resulting in substantial losses over the recent months. Consequently, the company is compelled to let go a large portion of its workforce.

Considering the downturn this year, Boyd may be less enthusiastic about a new acquisition. However, if the company is aiming for a forward-thinking strategy, a merger with Tropicana Evansville could be beneficial for both parties.

Is MGM returning to the Chicago area?

MGM Resorts may re-enter the Chicago area by acquiring Horseshoe Hammond.

The Grand Victoria Casino, located a little west of Chicago, was once owned by the company.

This riverboat casino is smaller, featuring just over 1,000 slot machines and some table games.

In 2018, Eldorado bought the casino from MGM for $327 million.

It would be logical for MGM to invest in Horseshoe Hammond, as they prefer to support proven successes.

The company possesses large, thriving casinos in close proximity to major markets such as:

• the Las Vegas strip
• Atlantic City
• Detroit
• Washington, DC
• New Orleans

Considering Chicago’s status as one of the country’s largest cities, it would be logical for MGM to consider a return to the area.

MGM would greatly benefit from purchasing Horseshoe Hammond.

Why would the company come back to the area just a few years after leaving?

Initially, the Grand Victoria didn’t particularly match with MGM’s portfolio.

Despite its proximity to Chicago, there are other options closer to the downtown area. Given that Grand Victoria is a 50-minute drive away, residents are more inclined to gamble at nearer casinos.

MGM’s standards do not align with being the third or fourth option in the area.

The company could leap to the forefront through Horseshoe Hammond.

Being the most profitable retail casino in Indiana, it has already established itself as a powerhouse in the Chicagoland area.

The casino, which is a 25-minute drive from the downtown area’s core, already attracts a multitude of customers from the Illinois side of the border.

Horseshoe Hammond is significantly larger than Grand Victoria, boasting over 3,000 slot machines compared to Grand Victoria’s 1,100.

The size and demonstrated profitability of it might be sufficient to pique MGM’s interest in buying it.

No matter who eventually purchases the three casinos from Caesars, actions will need to be taken in the upcoming months. Caesars will be busy trying to divest its Indiana holdings with the Dec. 31 deadline approaching.