Inside Gaming: Reports of Possible Golden Nugget-Casinos Merger
In this week's Inside Gaming, reports surface of a possible merger between two major industry operators, New Jersey sports betting revenue enjoys a huge boost in September, and MGM Springfield enjoys a successful first full month since opening.
Sources Tell of Golden Nugget Casinos Merger Offer to Caesars
Among the current industry news is talk of a possible merger between Caesars Entertainment and Golden Nugget Casinos, as CNBC reported Wednesday.
According to CNBC's sources, last week Golden Nugget Casinos owner Tilman Fertitta offered a deal to Caesars Entertainment that would value the casino at $13 per share.
The merger would reportedly involve Fertitta exchanging stock from a private company for shares of Caesars. Also part of the deal would be "somewhere between a $2 billion and $3 billion dutch tender to give Caesars shareholders an option to sell," say CNBC's sources.
A "dutch tender" works like an auction in which a company offers to buy back shares within a certain price range, giving shareholders a time frame within which to indicate the lowest price at which they would sell. The company then finds investors to purchase the shares at the asked for price.
After being down 16 percent on the year to date, Caesars stock (CZR on the NASDAQ) increased just over 14 percent on Wednesday after reports of the possible merger began to surface.
If the deal is agreed to and approved, Fertitta would place several restaurants and brands in Caesars locations. The deal would not include the NBA franchise owned by Fertitta, the Houston Rockets.
"The merger would create one of the largest gaming and hospitality companies in the world," explains CNBC. Fertitta would serve as chairman and CEO as well as the combined company's largest shareholder.
According to Reuters, the possible merger is just one of the plans Caesars is currently pursuing, having also recently explored a bid for Jack Entertainment owned by Dan Gilbert of Quicken Loans.
Drawing from their sources, Reuters adds that "It is unclear whether Caesars will entertain the offer, given the company has a market capitalization of $6.3 billion and Fertitta's net worth is pegged by Forbes at $4.5 billion."
New Jersey More Than Doubles Sports Betting Revenue in Second Month
It isn't surprising to discover sports betting to be thriving in New Jersey just a few months into its existence. However, the rapidity of growth might be raising some eyebrows, and certainly has gotten the attention of other states currently contemplating legislation to allow sports betting.
Last Friday the New Jersey Division of Gaming Enforcement shared monthly sports betting revenue reports from operators, revealing almost $24 million in total revenue among them. That's a big jump from the nearly $9.2 million in August, and in fact represents more than half of the almost $40.5 million in revenue realized so far this year since the first sports bets were taken in June.
The amount being wagered was up significantly in September as well, thanks both to increased numbers of operators and the start of football season. During the first three months about $153 million in sports bets had been made, then in September alone there were about $184 million in wagers placed.
Online and mobile wagering was responsible for more than half of the sports betting revenue realized by New Jersey operators in September, earning more than $12.5 million or about 52.4 percent of the total.
Resorts Atlantic City led the way with just over $8.5 million in revenue, most of which via the DraftKings Sportsbook, plus some from BetStarsNJ added by Resorts mid-month. That's up from just over $3 million in sports betting revenue for Resorts in August.
New Meadowlands Racetrack who licenses the FanDuel Sportsbook was the next-highest revenue earner with about $2.85 million, down slightly from the $3.06 million of August.
Giants in the daily fantasy sports market, DraftKings and FanDuel are currently dominating sports betting in New Jersey, too, as the other operators all combined for the remaining $1.2 million in revenue.
Wondering how $12.5 million in online sports betting revenue compares to what online poker is generating these days in New Jersey? As pokerfuse points out this morning, that's almost eight times the $1.6 million generated by online poker. In fact, that total challenges the $16.4 million NJ online poker operators have earned for the entire year to date.
First Month Meets Expectations for MGM Springfield
Finally — and continuing with the topic of revenue reports — figures for MGM Springfield's first full month of operation were released earlier this week by the Massachusetts Gaming Commission, showing just under $27 million in gross gaming revenue for the month.
About $18.1 million of that total was generated by slots, with the other $8.8 million coming from table games.
The overall revenue total met the company's expectations for the month according to President and COO Mike Mathis, reports WWLP.
Mathis also noted the company was "pleased with the solid visitor volume we experienced in September." After opening in late August, reports during the first week of operations indicated the casino about 50,000 visitors each weekend day and 25,000 each weekday.
Plainridge Park Casino (in operation since 1999) located about an hour-and-a-half east of Springfield in the southeastern part of the state, experienced $14.3 million in revenue for September, slightly down from the almost $15.4 million in August.
Photo: "Golden Nugget," Shiny Things, CC BY 2.0.
