Caesars Entertainment (NASDAQ: CZR) is expected to be bought this year, according to traders on Kalshi, with a related event contract presently 80% in "yes" territory.
On this reporter's recommendation, Kalshi, the biggest US prediction market, launched the "Will Caesars be acquired this year?" yes/no derivative earlier this month. Days after it was revealed that Caesars was considering several takeover offers, including one from Tilman Fertitta and a management-led buyout, the event contract entered into effect. The contract will resolve to "yes" if a deal is announced before January 1, 2027.
"The announcement must involve a definitive, binding agreement accompanied by public announcement. Letters of intent, memoranda of understanding, or agreements in principle do not qualify. The deal does not need to close as long as an agreement has been announced,” according to Kalshi’s guidelines governing the derivative.
The contract has drawn close to $11,000 in volume since it went live on March 2 at 3 PM New York time. On the one hand, no prediction market volume record will be broken by the Caesars takeover wager. However, there is some interest in it.
Talk about Caesars' takeover is currently quiet
A week has passed since it was revealed that Fertitta made a $34 per share offer for Caesars, surpassing a $33 per share deal allegedly made by Carl Icahn, who started a fresh investment in the casino operator in 2024 and was successful in appointing two directors to the board.
Some of the sluggishness in the Kalshi contract may be explained by the fact that neither Fertitta nor Icahn have made their interest in purchasing the Harrah's operator publicly known, and there hasn't been much talk about it lately.
There are rumors that Icahn is waiting to see and that Caesars and Fertitta may have a 45-day window for exclusive negotiations. Which potential suitor gets Caesars is not specified in the Kalshi event contract. As long as a transaction is announced, the answer is "yes."
Event contracts linked to particular acquirers are offered by Kalshi and certain rivals that market mergers and acquisitions; the acquirer of Warner Bros. is a good example. Exploration. Netflix, Paramount, or "none" are the options in that scenario.
Additional Details of Kalshi Caesars' Contract
It should come as no surprise that Kalshi's Caesars contract depends in part on the flow of news. Before news surfaced on March 11, the day when Fertitta made the previously mentioned $34 per share offer, the derivative traded in a small range.
The price of "yes" contracts reached 88 cents as a result of such conjecture. The price of those derivatives peaked on March 13 at 91 cents, but it has subsequently decreased, coinciding with a slowdown in media coverage of the alleged transaction.
On Kalshi, buyers of the "yes" contract have a track record. Since 1999, Caesars has had four takeovers. The most recent being Eldorado Resorts' $17.3 billion acquisition of the gambling corporation in 2020, which gave rise to its current form.
