Eldorado Resorts, Inc. (NASDAQ:ERI) CEO Tom Reeg told the Louisiana Gaming Control Board (LGCB) this week his company will spend $500 million over the next four years in the Pelican State, including enhancements to the Belle of Baton Rouge riverboat casino, a venue so decrepit the gaming boss wouldn’t even stay there during his recent visit.
Reeg was in the state to meet with the LGCB regarding Eldorado’s planned $17.3 billion takeover of Caesars Entertainment Corp. (NASDAQ:CZR), which the agency approved on Thursday. LGCB members took the opportunity to press the executive on plans for the riverboat casino, which is usually among the worst laggards in Louisiana.
That asset in its current state is not acceptable to the state and it’s not acceptable to us either,” said Reeg, according to a meeting transcript obtained by Casino.org.
The Belle of Baton Rouge joined ERI’s portfolio in 2018 via the company’s $1.85 billion acquisition of Tropicana Entertainment. ERI runs the gaming and hotel operations while Gaming and Leisure Properties owns the real estate assets. Under those arrangements, the tenant, not the landlord, is responsible for property upkeep and investments.
So Bad, He Stayed Elsewhere
The Belle of Baton Rouge is located in the state capital and LGCB Chairman Ronnie Jones said to Reeg he doesn’t want the city “to get lost in the weeds” as Eldorado completes its takeover of Caesars.
That deal is expected to be finalized in the first half of this year and when it’s completed, the combined company will control five Louisiana gaming properties – the Isle of Capri, the Belle of Baton Rouge, Harrah’s New Orleans, Harrah’s Louisiana Downs, and the Horseshoe Bossier City.
Earlier this week, ERI said it’s selling the Eldorado Resort and Casino in Shreveport to Maverick Gaming for $230 million.
“The fact that I stayed at L’Auberge last night is a comment on our view of the state of the Belle as it sits today,” said Reeg, according to the transcript.
The L’Auberge Casino & Hotel is operated by ERI rival Penn National Gaming and its real estate is also owned by Gaming and Leisure Properties.
Breaking Down The Investments
Of the $500 million ERI is committing to Louisiana over the next four years, $113 million will be allocated to transforming the Isle of Capri in Westlake into a land-based venue. State-mandated investments at Harrah’s New Orleans, which Reeg said will be the new company’s flagship property in the state, will command another slice of the $500 million pie.
The ERI leader didn’t mention a specific dollar amount to be allocated to the Belle of Baton Rouge, but Jones was quick to point out the company has only spent $1.1 million sprucing up the property since acquiring it in 2018.
Rehabbing some properties could be a prominent theme for the combined Eldorado/Caesars. Earlier this year, Caesars Tony Rodio acknowledged that company hadn’t kept up with adequately maintaining Bally’s in Atlantic City, N.J.
Last month. Caesars said it will pour $24 million into fixing up Harrah’s on the Boardwalk. Both Bally’s and Harrah’s have been subject to poor reviews and unsavory comments on travel sites, such as Expedia and TripAdvisor.