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State watching as corporate structure above Horseshoe Casino shifts

State watching as corporate structure above Horseshoe Casino shifts

State gambling regulators said Tuesday that they are closely monitoring a corporate restructuring at debt-hobbled Caesars Entertainment Corp. that would alter the ownership of the Horseshoe Casino Baltimore.

Caesars Entertainment is buying the parent company of Caesars Growth Partners — part-owner of the Horseshoe — in a move designed to bolster the gambling giant's finances.

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Caesars Growth Partners owns nearly 41 percent of the Horseshoe, which has been performing below state projections since it opened in August. Detroit-based Rock Gaming owns 29 percent, and other investors own the balance.

The agreement to merge Caesars Entertainment and Caesars Acquisition Co. follows last week's announcement of plans by another Caesars affiliate to file for Chapter 11 bankruptcy protection.

The bankruptcy of Caesars Entertainment Operating Co. is not expected to affect the Baltimore casino, the Maryland Lottery and Gaming Control Agency said Tuesday. That company does not own the Horseshoe, but manages its daily operations.

"Any changes to this company that may impact this relationship will be subject to investigation and oversight," the state agency said in a statement.

Stephen Martino, the agency's director, said the agency and the Gaming Control Commission have known of the company's financial condition and been monitoring it since the license was awarded in 2012.

"We will continue to communicate closely with Caesars management and monitor its progress and activity to ensure the company's reorganization plans ameliorate its financial situation," Martino said.

The Horseshoe sits on city-owned land leased to the casino. The property "would not in any case" be included in any real estate spinoff as part of the reorganization efforts, the agency said.

The merger will make Caesars Growth Partners a wholly owned subsidiary of Caesars Entertainment. That will allow the operating company to be restructured without significant outside financing, according to a joint statement by Caesars entities.

The Horseshoe's revenue rose from $22.5 million in October to $23.4 million in November. But revenues in its first three months have been about one-third lower than state consultants predicted in 2013.

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