Casino giant Caesars Entertainment Inc. has agreed to sell its Caesars Southern Indiana casino to the Eastern Band of Cherokee Indians (EBCI) for $250 million, news emerged Thursday.
The Southern Indiana property is being sold to the tribal operation a year after Caesars completed its $90 million renovation and expansion.
Caesars Southern Indiana is Caesars’ second property in the Hoosier State the company has agreed to sell this year. The casino giant announced in October that it had entered into an agreement to offload Tropicana Evansville to Bally’s Corporation. That deal is expected to close by mid-2021.
Thinning its portfolio of properties in Indiana was one of the conditions under which the state Gaming Commission gave in July its approval for Caesars’ $17.3 billion marriage with fellow casino operator Eldorado Resorts.
The gaming regulator ordered Caesars to sell three of its casinos across Indiana by the end of the year to prevent an “undue economic concentration” of the state’s gaming industry following its tie-up with Eldorado.
Late last month, the Indiana Gaming Commission gave the casino operator an additional year to find a buyer for the third property it intends to sell, Horseshoe Hammond.
The Caesars Southern Indiana Sale
The Eastern Band of Cherokee Indians did not emerge as a surprise buyer of the Southern Indiana casino. Tribal leaders penned a letter of intent last month to express their interest in purchasing the recently expanded hotel-casino complex.
Under the terms of that letter, Caesars was supposed to work exclusively with the Tribal Council for 45 days from the date the casino operator signed the letter. Signing it, the company also agreed to not “entertain offers from other potential buyers.”
As mentioned above, EBCI will pay $250 million for Caesars Southern Indiana. The property will keep its name and Caesars branding and will remain part of the Caesars Rewards loyalty program. That has become possible through a new annual lease agreement EBCI signed with VICI Properties, which owns the land Caesars Southern Indiana is located on.
Under the terms of that new agreement, EBCI will pay to VICI annual rent payments of $32.5 million. As a result of the sale of Caesars Southern Indiana, Caesars’ annual payments to VICI under a Regional Master Lease agreement between the two companies will be reduced by $32.5 million.
Commenting on the sale of Caesars Southern Indiana to the Eastern Band of Cherokee Indians, Caesars CEO Tom Reeg said that they are excited to expand a long-standing relationship with the tribe and that since they originally teamed up in 1996, they have admired their growth and the success of their properties.
Richard Sneed, EBCI’s principal chief, said that they are pleased to build upon on their long-standing partnership with the Las Vegas casino giant as they “look to advance our interest in commercial gaming in the coming years.”