Connect with us

News

Caesars Granted Extra Year To Sell Horseshoe Hammond Casino

Caesars was originally required to sell Horseshoe Hammond and two other properties by Dec. 31 to complete its merger with Eldorado, but was given more time.

Caesars Entertainment Inc. received an early Christmas gift this year.

The company was given a one-year extension by state officials to sell the Horseshoe Hammond Casino, pushing the deadline to the end of 2021.

The Indiana Gaming Commission (IGC) voted unanimously in late November to delay its own previously-imposed deadline.

This summer, the IGC told Caesars that, as part of its mega-merger with Eldorado Resorts, it would need to sell three of its five Indiana casinos by Dec. 31.

Caesars has since sold Tropicana Evansville and is negotiating a sale of Caesars Southern Indiana in Elizabeth with the Eastern Band of Cherokee Indians.

The Hammond casino has not traveled the same fast track.

‘Unique challenges’ lead to more time for Horseshoe Hammond

Hammond’s status as the state’s highest-grossing casino and its prime location near downtown Chicago would seem to make it a hot item.

But, in terms of finding a buyer, the IGC has cited “unique challenges” to selling the Hammond site.

Difficulties include the uncertainty of Illinois’ gambling market – Chicago, specifically.

This fall, Mayor Lori Lightfoot issued a request for information related to casino development in the “heart” of Chicago. Lightfoot has long been a proponent of creating a downtown Chicago casino; the request represented a major step toward developing that vision.

A Chicago casino would undoubtedly attract business away from Horseshoe Hammond by providing a more convenient option for city residents currently driving across the border to gamble.

Additional market complications include the relocation of Lake Michigan casinos to inside Gary, Indiana.

Also impacting the possibility of a Hammond sale, noted the IGC, are “general uncertainties associated with the ongoing COVID-19 pandemic.” Such unknowns include record-breaking positivity rates, increased restrictions, and the still-unknown timing of potential vaccines.

It seems unlikely Indiana casinos could again close. But the ongoing COVID-19 wave, combined with the likelihood of another following the holidays, has caused anxiety in the industry.

Illinois Gov. J.B. Pritzker, for instance, announced in late November a statewide shutdown of casinos following record-breaking positivity counts.

Indiana’s conservative leadership is less inclined to take similarly drastic actions, but has instituted stricter protocols for casino patrons.

In general, the IGC believes its one-year extension for the Hammond sale “is in the best interest of the state and local community.”

Its order says the move “will not negatively impact operations” at the casino.

Decision another ripple of Eldorado-Caesars merger

The need for a deadline extension follows a divestment arrangement secured in response to the $17.3 billion merger between Eldorado Resorts and then-named Caesars Entertainment Corp.

The merger was finalized in July following numerous approvals, although the IGC included a big requirement before it approved the sale.

IGC officials told company leadership they must sell casinos in Evansville, Elizabeth, and Hammond. It also permitted transfers of racino licenses at Hoosier Park and Indiana Grand.

IGC’s insistence addressed concerns about “undue economic concentration; corporate control; Eldorado’s rapid corporate growth,” argued the state agency. Control of the three casinos would have left the merged company with more than half of Indiana gaming revenues.

Caesars CEO Tom Reeg initially planned to keep the Hammond site following the merger, but ultimately cooperated with the IGC’s requirement. The company has since “acted diligently and in good faith” to meet the state’s divestment requirement, wrote the IGC.

Caesars officials have also promised a $60 million expansion effort at Indiana Grand and Hosier Park. To soothe concerns about the quality of those properties, officials have also committed to a 10-year, $25 million maintenance fund.

More in News