Posted on: January 16, 2024, 05:34h.
Last updated on: January 16, 2024, 05:34h.
Caesars Entertainment (NASDAQ: CZR) has operated the eponymous casino in Windsor, Ontario since the venue opened three decades ago, but for the first time, the company is facing competition for those rights.
The Ontario Lottery and Gaming Corp., the regulatory agency that actually owns Caesars Windsor, is reportedly mulling bids for the venue’s operating rights from the incumbent as well as Bally’s (NASDAQ: BALY) and Mohegan Gaming & Entertainment — the casino arm of Connecticut’s Mohegan Tribe.
Speaking on the condition of anonymity, sources with knowledge of the matter told the Globe and Mail that the Ontario Lottery and Gaming Corp. is considering bids from the aforementioned trio to run the Windsor casino. Officials from the regulatory agency and the gaming companies did not respond to the newspaper’s request for comments.
It’s possible that the Ontario Lottery and Gaming Corp. will render a decision on Windsor casino’s operator in the third or fourth quarter. If Caesars is replaced, the new operator would take control of the venue in 2025.
It’d Be a Loss for Caesars, Ontario
When Eldorado Resorts announced plans to acquire old Caesars in 2019, CEO Tom Reeg — now at the helm of the Caesars — said that international opportunities would have to be “stupendous” for the combined company to consider expansion outside the US.
Since then, the Harrah’s operator has halted plans that don’t involve domestic markets. However, Caesars Windsor is a different proposition. It’s clearly close to the US and it’s a key component in Caesars’ highly profitable managed casino division. That unit runs gaming venues on behalf of other owners, including the Ontario Lottery and Gaming Corp. and Native American Tribes.
Additionally, Caesars Windsor is the operator’s best alternative to the commercial casinos in Detroit because the company currently doesn’t have a land-based venue in Michigan.
If the Ontario Lottery and Gaming Corp. decided to go in another direction, it could be a loss for Windsor and the province at large. While Bally’s and Mohegan have expansive operations throughout the US and, the case of the latter, beyond, neither can compare to Caesars’ brand recognition. That factor is widely viewed as key in rejuvenating Windsor and luring more visitors to the city.
Still, there’s some interesting to consider. In 2018, the Ontario regulator came under fire because it awarded two permits for casinos near Niagara Falls to Mohegan despite Caesars pledging more capital to enhance those venues.
Why Caesars Should Have Inside Track in Ontario
If Ontario regulator jettison Caesars, it’d cost the new operator almost $60 million to rebrand the Windsor casino. Both Bally’s and Mohegan can afford that, but that doesn’t ensure those operators will enjoy the same success as Caesars.
That’s something regulators most consider because the city of Windsor depends on the casino for 2.5% of its annual budget, according to the Globe and Mail.
On a related note, Caesars’ loyalty program — the industry’s largest — and the operator’s proficiency in iGaming and sports wagering are viewed as assets in the Windsor casino competition. The current scuttlebutt indicates that Caesars is in fact the leader for the Windsor license.