Park Place-Caesars merger OK’d without conditions

David Strow

Wednesday, Nov. 3, 1999 | 11:12 a.m.

The New Jersey Casino Control Commission voted unanimously today to approve Park Place Entertainment Corp.'s $3 billion acquisition of Caesars World Inc., rejecting calls to place restrictions on Park Place expansion in Atlantic City.

In a 22-page opinion, the commission acknowledged that the acquisition will result in the concentration of the Atlantic City market in the hands of three companies -- Park Place, Trump Hotel & Casino Resorts and Harrah's Entertainment Corp. The three companies will hold a 73 percent market share in Atlantic City after the merger, with Park Place controlling 30 percent.

However, the commission said it did not want to "devolve into a mere numbers game" in considering whether or not the market had become overly concentrated -- and said it believed the addition of casinos by Mirage Resorts, Boyd Gaming and MGM Grand in the next few years would help lessen market concentration. Moreover, the commission said it believed competition would remain vibrant in Atlantic City, even after the acquisition.

As evidence, the commission said Trump had been permitted through expansion to gain more than 30 percent market share, but "has not been able to dictate anti-competitive prices."

It therefore concluded that the Park Place acquisition would not result in the "undue economic concentration" that, under New Jersey law, can be used as grounds to reject an acquisition application.

"It is clear that for the foreseeable future the market will consist of seven ventures vigorously competing with one another," the commission wrote. "That actual competition, and the inability of any firm, singly or in combination, to use its market position improperly, militates toward approval of the transaction.

"Competition in the casino market in Atlantic City is vibrant and is likely to remain so."

The New Jersey Division of Gaming Enforcement had asked for restrictions on Park Place's license that would discourage the Las Vegas-based casino operator from expanding in Atlantic City until new properties could come on line.

The acquisition has already been approved in Nevada and Mississippi.