- »OLG Enters Procurement Process for Windsor Casino
OLG Enters Procurement Process for Windsor Casino
Earlier in 2019, Eldorado Resorts announced its intention to buy Caesars Entertainment. The multi-billion-dollar deal was one of the largest in the gambling world. At that time, employees at Caesars Windsor in Ontario were assured that the deal would not affect them.
That is not true. Barely six months after the deal was announced, the Ontario Lottery and Gaming Corporation decided to seek another operator for Windsor Casino.
New Year Announcement from OLG
One week into 2020, the Ontario Lottery and Gaming Corporation (OLG) announced its intention to create a Windsor Gaming Bundle – consisting solely of the Windsor Casino at this point – and add it to the modernization procurement process.
Basically, Windsor Casino has long been operated by Caesars Entertainment, thus the name Caesars Windsor. But OLG now wants to select a “long-term service provider” that will complete OLG’s “modernization of the Ontario gaming marketplace.” OLG President and CEO Stephen Rigby also added, “It will also help protect the long-term competitiveness of the Windsor market.”
None of this will happen right away.
OLG entered into an agreement to extend its current contract with Caesars Entertainment past its expiration date of July 31, 2020. In fact, the deal extended it for three years.
Over the coming years, OLG must take several steps, starting with the release of a “Request for Pre-Qualification” by the fall months of 2020. This will open the window for submissions.
From that point, a slow transition away from Caesars and preparing for a new operator will begin. OLG will want the new operator to take over by the middle of 2023, before the end of the extended agreement with Caesars. The new operator must also retain employees for a minimum of 12 months after that successful transition.
When news of the Eldorado-Caesars acquisition swept the business world in mid-2019, OLG had to issue a statement. And it was simple: “It remains business as usual at Caesars Windsor,” said OLG Director of External Communications Tony Bitonti.
It didn’t take long for that to change.
What did not change was the status of employees, at least for the time being. They are protected by Unifor Local 444, a union which assured them that their collective agreement with OLG would remain intact. That was true and remains true.
Even after the new operator takes over in mid-2023, OLG noted that “unionized employees will transfer to the successful proponent” via that collective agreement.
Details of a Mega-Deal
The announcement that Eldorado was buying Caesars took the gambling world by storm. Caesars had been experiencing financial woes for years, but it didn’t seem that Eldorado would have the resources to purchase and handle all of the properties involved.
Eldorado had been on a purchasing spree. It bought the Isle of Capri Casinos in 2017 for $1.7 billion and Tropicana Entertainment in 2018 for $1.85 billion. Those successful ventures prompted it to vie for Caesars and ultimately agree to buy it for $17.3 billion, including debt assumptions.
The deal is set to make Eldorado a direct competitor of major casino companies like MGM Resorts, Wynn Resorts, and Las Vegas Sands.
Moreover, Eldorado is poised to become the largest domestic gaming company in America, as it will own about 60 properties spread out over nearly half of US states.
Shedding Extra Weight Before the Big Day
Numerous properties were inevitably going to be offloaded before the finalization of the Eldorado-Caesars deal. It is the nature of such a beast.
The first ones were Harrah’s New Orleans in Louisiana, Harrah’s Laughlin in Nevada, and Harrah’s Atlantic City in New Jersey. A company called VICI Properties took over for a total of $3.2 billion, money set to come in handy for Eldorado to finalize the deal.
A company called Twin River then bought the Isle of Capri Casino in Kansas City, Missouri, and Lady Luck in Vicksburg, Mississippi. And Maverick Gaming bought the Eldorado Shreveport in Louisiana for $230 million.
Caesars didn’t take long to offload the Rio Hotel and Casino in Las Vegas, the off-Strip property that has long been home to the World Series of Poker. While Caesars did agree to continue operating the Rio for the next several years, Imperial Properties did buy the Rio for $516.3 million.
It should be noted that Caesars did not sell the WSOP, which will take place at the Rio again in 2020, though its future beyond this year is not yet clear.
It is very likely that Caesars will sell more properties before the deal, but no announcements have been made regarding the Strip casinos like the Cromwell, Linq, Bally’s, Harrah’s, Planet Hollywood, Flamingo, Paris, and Caesars Palace in Las Vegas.
Any sales may be announced soon, though, as the Eldorado-Caesars deal is likely to close in the first half of 2020.