The Rio All-Suite Hotel and Casino has been a very popular destination for Las Vegas locals and tourists since it opened in 1990. It was also a trend setter and the first major property in the Las Vegas Valley to popularize now ubiquitous features such as a large nightclub and enhanced swimming pool area. It was also the first all-suite resort in town and the first with floor to ceiling glass in every room. For a number of years it also had the most beautiful sign in Las Vegas.
The Rio is now under new ownership as Caesars Entertainment has sold the property to New York based Imperial Companies for $516.3 million in a deal announced earlier this week. The sale is expected to close in the first quarter of 2020 and at least in the short term is expected to not bring any changes to the visitor experience at the Rio. An SEC filing indicated that the Imperial has placed $5 million in an escrow account as a down payment. All of this is ‘subject to regulatory approvals’ but at first glance it all looks like a by the books sale.
For now, Caesars will continue to operate the Rio. Under the terms of the deal, Caesars will continue to run the show for at least two years in exchange for rent of $45 million per year. Imperial Companies has an option for a third year and after that can either contract with Caesars Entertainment to continue to operate the property or to assist with transition services. The World Series of Poker will remain at the Rio next year with speculation that it’ll find a new home after that.
Caesars is in the process of being acquired by Reno based Eldorado Resorts for $17.3 billion. Earlier this year, Eldorado CEO Thomas Reeg suggested that as part of the deal that ‘one or two’ of Caesars Las Vegas properties would be sold. The Elodorado purchase is also expected to be closed by the first quarter of 2020.
It wouldn’t be a gaming industry transaction without an optimistic sound bite quote in a press release from a corporate executive. Here’s Tony Rodio, CEO of Caesars Entertainment, giving his thoughts on the sale of the Rio:
“This deal allows Caesars Entertainment to focus our resources on strengthening our attractive portfolio of recently renovated Strip properties and is expected to result in incremental (cash flow) at those properties. The retention of the World Series of Poker and retention of Caesars Rewards customers are all factors that make this a valuable transaction for Caesars.“
While changes are not expected in the short term the deal opens plenty of questions for the long term. In the next couple of days we’ll take a look at the history of the Rio property and speculate on what could happen in the future.