Caesars Entertainment Partners with Sault Ste. Marie Tribe of Chippewa Indians; Acquires Michigan iGaming Operations from Wynn Resorts

Rhea-AI Summary

Caesars Entertainment, Inc. (CZR) acquires WynnBET's Michigan iGaming business and extends iGaming market access rights with the Sault Ste. Marie Tribe of Chippewa Indians. The deal allows Caesars to operate additional digital brands in Michigan and transition existing WynnBET customers to its platform.

Insights

Market Research Analyst

The acquisition of WynnBET's Michigan iGaming operations by Caesars Entertainment represents a strategic move within the online gaming industry, which is seeing consolidation as companies vie for market share in this rapidly growing sector. The online gaming market, often referred to as iGaming, has been expanding significantly in the U.S. following the relaxation of regulations. Michigan, in particular, stands out as one of the largest iCasino markets, making this acquisition potentially impactful on Caesars' revenue streams and market presence.

Caesars' ability to operate additional digital brands in Michigan could lead to increased customer acquisition and retention, tapping into WynnBET's existing customer base. This move could also generate cost synergies by consolidating operations and leveraging Caesars' existing infrastructure. For investors, the focus would be on how this acquisition might contribute to Caesars' top-line growth and whether it can effectively integrate WynnBET's operations to realize potential synergies.

Financial Analyst

The financial implications of the transaction include non-cash considerations such as the extinguishment, reductions and assignment of certain contractual obligations. This type of consideration can affect the balance sheet of Caesars Entertainment by potentially reducing liabilities and improving financial ratios. The company's commitment to a seamless transition for WynnBET iGaming customers also suggests an investment in customer service and platform integration, which could have short-term cost implications but may benefit long-term customer loyalty and brand strength.

Investors would be interested in the transaction's impact on Caesars' earnings before interest, taxes, depreciation and amortization (EBITDA) and whether the acquisition will be accretive to earnings per share (EPS) in the foreseeable future. The strategic extension of iGaming market access rights with the Sault Ste. Marie Tribe of Chippewa Indians is also a critical factor, as it secures long-term growth opportunities in the region.

Legal Expert

Regulatory approvals are a significant hurdle in transactions involving gaming operations. The deal's success hinges on satisfying regulatory bodies that oversee iGaming, ensuring compliance with state and federal laws. The nature of the agreement with the Sault Ste. Marie Tribe of Chippewa Indians also underscores the importance of navigating tribal compacts and regulations, which can be complex given the sovereign status of Native American tribes.

For stakeholders, understanding the legal landscape is crucial, as any delay or failure to obtain regulatory approvals can derail the expected benefits of the acquisition. The partnership with the Sault Tribe, who operates Kewadin Casinos, may offer Caesars a competitive advantage, given the tribe's established presence and experience in the Michigan gaming market.

LAS VEGAS & RENO, Nev.--(BUSINESS WIRE)-- Caesars Entertainment, Inc. (NASDAQ: CZR) (“Caesars”) today announced an agreement to acquire the operations of WynnBET’s Michigan iGaming business and a long-term extension of iGaming market access rights with the Sault Ste. Marie Tribe of Chippewa Indians, subject to regulatory approvals. As part of the transaction, Caesars gains access to the Sault Tribe’s iGaming skins, enabling Caesars to operate additional digital brands in Michigan, and existing WynnBET customers will be transitioned to Caesars’ Michigan iGaming platform, pending regulatory approvals. Wynn and Caesars will receive non-cash consideration, including extinguishment, reductions, and assignment of certain contractual obligations related to both parties’ businesses.

“As we continue to grow our iGaming franchise, the assumption of WynnBET’s iGaming operations in Michigan allows us to tap into a significant market and customer base, providing a crucial step forward in growing our digital products and offering players more ways to play,” said Matt Sunderland, SVP & Chief iGaming Officer for Caesars Entertainment. “We are honored to work with the Sault Ste. Marie Tribe of Chippewa Indians and look forward to growing with them in Michigan.”

WynnBET’s iGaming operations provide Caesars with the unique opportunity to expand further into one of the largest iCasino markets in the U.S. while continuing to operate both Caesars Sportsbook and Caesars Palace Online Casino. Caesars intends to transition the WynnBET iCasino operations in Michigan later this year to one of the flagship gaming brands within the Caesars portfolio. Caesars is committed to a seamless transition and premium customer experience for current WynnBET iGaming customers. More information on Caesars’ new iCasino offering will be announced at a later date.

“It was paramount that our next partner in iGaming possessed both expertise in the U.S. iGaming market and a history of strong partnerships in Indian country. We believe we found that with Caesars and look forward to being part of their new iCasino offering,” said Austin Lowes, Chairman of Sault Ste. Marie Tribe of Chippewa Indians.

The Sault Tribe currently owns and operates Kewadin Casinos, which consist of five land-based casinos located throughout the Upper Peninsula of Michigan.

About Caesars Entertainment, Inc.

Caesars Entertainment, Inc. (NASDAQ: CZR) is the largest casino-entertainment company in the US and one of the world’s most diversified casino-entertainment providers. Since its beginning in Reno, NV, in 1937, Caesars Entertainment, Inc. has grown through development of new resorts, expansions and acquisitions. Caesars Entertainment, Inc.’s resorts operate primarily under the Caesars®, Harrah’s®, Horseshoe®, and Eldorado® brand names. Caesars Entertainment, Inc. offers diversified gaming, entertainment and hospitality amenities, one-of-a-kind destinations, and a full suite of mobile and online gaming and sports betting experiences. All tied to its industry-leading Caesars Rewards loyalty program, the company focuses on building value with its guests through a unique combination of impeccable service, operational excellence and technology leadership. Caesars is committed to its employees, suppliers, communities and the environment through its PEOPLE PLANET PLAY framework. Know When To Stop Before You Start.® Gambling Problem? Call 1-800-522-4700. For more information, please visit. www.caesars.com/corporate.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240220028424/en/

Investor Relations:

Brian Agnew, bagnew@caesars.com

Charise Crumbley, ccrumbley@caesars.com, 800-318-0047

Media Relations:

Kate Whiteley, kwhiteley@caesars.com

Brad Harwood, bharwood@caesars.com

Source: Caesars Entertainment, Inc.

FAQ

What did Caesars Entertainment, Inc. (CZR) announce?

Caesars announced an agreement to acquire WynnBET's Michigan iGaming business and extend iGaming market access rights with the Sault Ste. Marie Tribe of Chippewa Indians.

What does the deal with WynnBET entail for Caesars?

The deal allows Caesars to operate additional digital brands in Michigan and transition existing WynnBET customers to its Michigan iGaming platform.

Who is the Chief iGaming Officer for Caesars Entertainment?

Matt Sunderland is the SVP & Chief iGaming Officer for Caesars Entertainment.

What will happen to WynnBET's iCasino operations in Michigan?

Caesars intends to transition the WynnBET iCasino operations in Michigan to one of its flagship gaming brands within its portfolio later this year.

What does the Sault Tribe currently own and operate?

The Sault Tribe currently owns and operates Kewadin Casinos, consisting of five land-based casinos located throughout the Upper Peninsula of Michigan.