Recent rumors have sparked speculation about Boyd Gaming’s intentions to acquire Penn Entertainment. Despite no official comment from Penn, a Reuters report in June suggested that Boyd Gaming had made a $9 billion acquisition offer. Another report indicated a possible partnership between Boyd and Flutter to facilitate the deal. This situation mirrors the 2019 merger of Caesars Entertainment and Eldorado Gaming, which combined to own 60 casinos across 16 states. The merger, however, faced significant regulatory hurdles and required Eldorado to divest properties in Kansas, Louisiana, Missouri, and Nevada to avoid anticompetitive concerns.
The Federal Trade Commission (FTC) had expressed concerns that the merger could reduce competition, leading to higher prices and lower quality for consumers. Similarly, a Boyd-Flutter partnership acquiring Penn’s assets would face intense scrutiny, particularly in Louisiana. Boyd currently owns 27 casinos in 10 states, while Penn operates 43 properties across 20 states. Combined, they would control 70 retail casinos nationwide. In Louisiana alone, the new entity, potentially called BFP, would own half of the state’s retail casino licenses, drastically impacting the competitive landscape.
Ronnie Jones, former chief of the Louisiana Gaming Control Board (LGCB), highlighted the unprecedented nature of such a deal in the state. With 20 retail casino licenses available in Louisiana, BFP’s control of 10 licenses would concentrate market power, raising questions about competition and market fairness. Jones emphasized that the LGCB has historically avoided ordering companies to divest properties, suggesting that the board might instead seek assurances of continued capital investment and competitive practices from BFP.
Regulators might impose conditions similar to those seen in the Caesars-Eldorado merger, such as mandated capital improvements and divestitures to maintain market competition. For example, in Indiana, the gaming commission required Caesars to divest three casinos post-merger and maintain staffing levels for a specified period. In Louisiana, the LGCB could demand guarantees that BFP would invest in property upgrades and offer competitive promotions to attract customers, ensuring that the market remains dynamic and consumer-friendly.
Brendan Bussmann, an international gaming consultant, noted that the scale of the potential BFP merger exceeds that of the Caesars-Eldorado deal, especially in terms of property concentration within a single state. This would necessitate careful regulatory navigation to prevent monopolistic practices. The merger’s approval process would likely involve extensive negotiations to align the interests of the state with those of the merging entities.
While Boyd Gaming has not directly addressed the acquisition rumors, CEO Keith Smith acknowledged the company’s expertise in mergers and acquisitions. He indicated that Boyd remains open to exploring opportunities that align with its strategic goals. However, industry analysts like Barry Jonas and Jake Pollard express skepticism about the feasibility and strategic fit of such a large-scale deal in the near term.
The potential Boyd Gaming and Flutter partnership to acquire Penn Entertainment’s assets represents a significant shift in the US gambling market landscape. The proposed deal would likely face substantial regulatory challenges, particularly in Louisiana, where market concentration would be unprecedented. Ultimately, the focus for regulators will be to ensure that the merger promotes healthy competition and continued investment in the industry, safeguarding consumer interests and market integrity.
