This week, executives from Fertitta Entertainment provided new details regarding the company's acquisition of Caesars Entertainment, following their preliminary licensing approval from the Nevada Gaming Control Board. Richard Liem, the CFO, and Steven Scheinthal, general counsel, received unanimous approval from the board on Wednesday, with a final consideration set before the Nevada Gaming Commission on July 23.
Tilman Fertitta, a billionaire and the founder of Fertitta Entertainment, is currently occupied with his role as the U.S. ambassador to Italy and San Marino. Liem and Scheinthal have both been long-time associates of Fertitta; Scheinthal has been with him since 1988 while Liem joined in 1999. They assured that Fertitta is not involved in daily operations, stating that the company’s board, which includes his wife, Paige Fertitta, oversees management in his absence.
With a wealth of experience in the Nevada gaming market, both executives have held licenses since 2005, when Fertitta acquired Golden Nugget Casinos. Their last appearance before the board was in 2023 related to the purchase of the former Hard Rock Lake Tahoe.
At the meeting, board members raised concerns about compliance issues. Caesars had incurred a $7.8 million fine last year for anti-money laundering violations linked to illegal bookmaker Mathew Bowyer, who is now banned from all Nevada casinos. Scheinthal reassured the board that Fertitta and Golden Nugget have maintained a clean compliance record. "We understand the importance of compliance… Everybody knows what the repercussions are in connection with not following the rules and regulations," he remarked.
Discussing the timeline for the Caesars acquisition, Scheinthal outlined the significant tasks ahead, indicating that closing the all-cash deal, valued at $17.6 billion—$5.7 billion in equity and $11.9 billion in assumed debt—could take over a year. The initial priorities include antitrust filings and obtaining gaming licenses across all of Caesars’ jurisdictions. Fertitta plans to submit a Hart-Scott-Rodino antitrust application to the Federal Trade Commission by July 13, which will trigger a 30-day waiting period. Their timetable for gaming license applications has been segmented into two phases, with the first applications expected to be filed this week and the remainder within 45 days. "We think that probably will take nine to 10 months from today to get that approval," Scheinthal estimated.
As a public company, Caesars is also obligated to file a proxy statement and secure shareholder approval. Following its annual meeting on June 9, the company is set to release second-quarter results on July 28 without an analyst call.
Scheinthal touched on financing considerations, revealing that, although Fertitta has secured a commitment letter from a group of banks to finance the acquisition, they are hoping to secure better terms in the market amidst rising interest rates. The U.S. Federal Reserve kept interest rates steady in June, with a decreasing likelihood of rate cuts in light of ongoing inflation and economic impacts from the U.S.-Iran conflict. "Our hope is that in the next few months there will be a window of opportunity where the market will be hotter and [it’s] a more interest rate friendly environment," he remarked.
Currently, there is a go-shop period until July 11 for the Caesars deal, during which investor Carl Icahn is attempting to make a competing bid for the company. His bid is reportedly $33 per share, which would surpass the $31 per share deal with Fertitta. Despite this, Caesars' board reportedly favors the Fertitta agreement due to its solid financing.
"When we have the money, we get HSR clearance, shareholder approval, and approval for all the various gaming jurisdictions, then we’ll be in a position to close the transaction," Scheinthal stated.
Another inquiry from the board concerned Fertitta’s 12% stake in Wynn Resorts, with some members questioning if it might be sold soon, given Wynn's recent woes and delays with its UAE resort tied to regional conflicts. Scheinthal clarified that there are no regulatory issues associated with passive ownership, stating, "We’re a passive investor in Wynn, and we like owning the Wynn stock; it’s our desire to keep owning the Wynn stock."
