FTC Requires Casino Operators Eldorado Resorts, Inc. and Caesars Entertainment Corporation to Divest Assets in Two Local Markets as a Condition of Merger
Twin River Worldwide Holdings, Inc. to buy divested assets
The Federal Trade Commission will require casino operator Eldorado Resorts, Inc. to divest casino-related assets in the South Lake Tahoe area of Nevada, and the Bossier City-Shreveport area of Louisiana, to settle charges that Eldorado’s $17.3 billion agreement to acquire Caesars Entertainment Corporation likely would be anticompetitive in those markets. The Commission also will prevent competitive harm in Kansas City, Missouri, where both companies currently operate casinos; the settlement gives the Commission the option to require an additional divestiture if a pending independent sale of one casino does not close timely.
The complaint alleges that the proposed acquisition would harm competition for casino services in the South Lake Tahoe, Bossier City-Shreveport, and Kansas City local markets. The combination thus would increase the likelihood that Eldorado would unilaterally exercise market power, leading to higher prices and reduced quality for consumers of casino services.
The terms of the settlement require Eldorado to divest the assets described below. The parties must maintain the viability, marketability, and competitiveness of the assets until the divestitures are complete. The proposed consent order appoints a monitor to ensure the parties’ compliance with the order to maintain assets, the consent order, and the divestiture agreements.
- In the South Lake Tahoe area, Eldorado must divest its only casino, the MontBleu Resort Casino and Spa, to Twin River Worldwide Holdings, Inc.
- In the Bossier City-Shreveport area, Eldorado is also required to divest its only casino, the Eldorado Casino Resort, to Twin River.
Independent from its proposed acquisition of Caesars:
- In Kansas City, Missouri, Eldorado is selling its Isle of Capri casino. Under the proposed settlement, if the Isle of Capri sale is not complete within 60 days after the proposed acquisition of Caesars closes, the Commission may, at its discretion, require Eldorado to divest the casino to a Commission-approved buyer within 12 months.
As detailed in the analysis to aid public comment, new entry or expansion is unlikely to deter or counteract the anticompetitive effects of the proposed acquisition in any of the affected markets. Casinos are highly regulated, with lengthy approval processes for licensure and a limited number of licenses granted in some states, such as Louisiana and Missouri.
The Commission vote to issue the complaint and accept the proposed consent order for public comment was 3-1-1, with Commissioner Rebecca Kelly Slaughter not participating, and Commissioner Rohit Chopra voted no and issued a dissenting statement. The FTC will publish the consent agreement package in the Federal Register shortly. Instructions for filing comments appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $43,280.
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