Horseshoe Casino GM explains how $85 million investment will transform gambling in southern Indiana

A rendering of the land-based casino under construction at Horseshoe Southern Indiana in Elizabeth, Ind. 

LOUISVILLE, Ky. (WDRB) — The parent company of Horseshoe Southern Indiana and three other Indiana casinos is set to be purchased by a competitor in a $17.3 billion deal announced Monday. 

Eldorado Resorts will buy Caesars in a cash-and-stock deal, creating a casino giant.

The deal comes as Horseshoe, which will soon be renamed Caesars, is building an $85 million land-based facility to replace its 20-year-old riverboat casino in hopes of winning back customers.

The Harrison County casino faces fresh competition in the Louisville area after the September 2018 opening of Derby City Gaming, which has slot-like historical horse racing machines, on Poplar Level Road.

The $17 billion merger puts about 60 casinos and resorts in 16 states under a single name, one of the biggest gambling and entertainment ventures in the United States.

"Together, we will have an extremely powerful suite of iconic gaming and entertainment brands, as well as valuable strategic alliances with industry leaders in sports betting and online gaming," Eldorado CEO Tom Reeg said in a prepared statement.

The company, which will be called Caesars, will be led by Reeg, along with Eldorado Chairman Gary Carano. It will be based in Reno Nevada, where Eldorado is based, with a "significant corporate presence" in Las Vegas, where Caesars is based.

Eldorado will pay $8.40 per share in cash and 0.0899 shares of Eldorado stock for each Caesars share, or $12.75 per share. The transaction values Caesars at about $8.6 billion, and Eldorado will pick up about $8.8 billion of the casino's debt.

Shareholders of Eldorado Resorts Inc. will hold about 51% of the company's outstanding stock, with Caesars Entertainment Corp. shareholders holding the remaining and 49%.

Earlier this year, billionaire Carl Icahn revealed an enormous stake in Caesars and pushed for fundamental changes at the company. Caesars, which operates more than 35 casinos in the U.S., emerged from bankruptcy protection in late 2017, but it's been struggling since.

Casinos have seen a tremendous uptick in revenue, however, with the broad legalization of sports betting.

Eldorado said Monday that it's also reached a real estate agreement with VICI Properties Inc. in which VICI will acquire the real estate associated with Harrah's Resort Atlantic City, Harrah's Laughlin Hotel & Casino, and Harrah's New Orleans Hotel & Casino for approximately $1.8 billion. Other terms of the deal include VICI being given right of first refusals for whole asset sale or sale-leaseback transactions on two Las Vegas Strip properties and the Horseshoe Casino Baltimore.

The Eldorado-Caesars deal is targeted to close in the first half of next year if approved by gaming regulators and shareholders.

Caesars' stock jumped 12.2% before the market open, while shares of Eldorado fell 6.6%.

Associated Press contributed to this report.

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