As it prepares to emerge from bankruptcy later this year, Caesars Entertainment remains tight-lipped about its apparent intent to enter the red-hot video gambling market in Illinois.
In December, a bankruptcy judge in Chicago granted a request by Caesars to purchase a 10 percent stake in Accel Entertainment, the state’s largest video gaming terminal (VGT) operator.
“Pursuant to the agreed-upon terms, the Debtors (Caesars) would acquire a 10 percent equity stake in Accel … for approximately $18m, subject to certain adjustments,” the court said in an order approving the deal.
When asked on Monday if she would like to comment on her company’s plans regarding video gaming in Illinois, Jan Jones Blackhurst, who is Caesars Entertainment’s executive vice president of public policy and corporate responsibility, said: “No … thanks for asking!”
A phone call to Accel was not returned.
It is still not clear if Caesars has followed through on the purchase of Accel or if it plans to eventually buy all of the company.
However, Caesars entry into the $1bn per year VGT market in Illinois would be consistent with remarks made last week by Caesars CEO Mark Frissora.
Frissora told analysts in Las Vegas his company will aggressively pursue mergers and acquisitions after securing the final regulatory approvals to emerge from bankruptcy.
“There’s going to be quite a few more [transactions] over the next couple of years, and we will be participants in those,” Frissora said.
“We’ve identified them; we’ve had 50 bankers come in to present to us. We’ve pretty much screened [targets] and we’re loaded … as soon as we emerge, to participate in the M&A market,” Frissora said.
Caesars would not be the first of Illinois’ riverboat casino operators to buy into the VGT market.
Penn National Gaming and Delaware North already are operating in the VGT market having acquired Accel competitors Prairie State Gaming and GEM, respectively.
“We welcome Caesars to the Illinois VGT industry, and aren’t concerned about competition in the marketplace,” said Penn National spokesman Eric Schippers.
The addition of Caesars would be yet another sign of the surge of the VGT market in Illinois, while the state’s riverboat casinos continue to decline.
“It makes sense that these [casino] companies are investing in entities that are their competition so they can recapture some of the losses that have been realized because of video gaming,” said Tom Swoik, executive director of the Illinois Casino Gaming Association.
In addition to Illinois, six other states similarly allow limited stakes gaming machines in non-casino venues such as bars, restaurants and truck stops. VGT legislation is also being considered in Pennsylvania.
No one seems to know why Caesars seems so reluctant to comment on its video gaming plans in Illinois.
“It’s been discussed for several months within the industry that Caesars was going to be buying into Accel,” said Michael Gelatka, president of the Illinois Gaming Machine Operators Association, which represents slot-route operators.
The video gaming industry in Illinois includes about 26,000 terminals in about 6,000 locations throughout the state.
“I think these big companies, looking into the future, see video gambling or the local gaming market as the next step … . The next place for growth is in the local market,” Gelatka said.