When MGM Resorts hired law firm Weil, Gotshal & Magnes, investors at Caesars Entertainment were ready to gamble.
Caesars had rejected a merger offer from Golden Nugget Casinos last year, and then announced its chief executive officer was stepping down this February. Now the lawyers are in the house.
It means that either the casinos are in trouble, or they are going to double down on a new deal. Investors are betting on a merger.
A New Deal
According to reports, MGM Resorts International is already in talks with Caesars Entertainment. They are respectively the second and fourth largest casino operators in the United States.
LasVegasnow.com, a CBS affiliate, said the MGM/Caesars deal would create "an overwhelming" presence in Las Vegas. It would give them control of roughly half of the hotel rooms in Las Vegas and Atlantic City.
Of course, it's not a done deal. Federal regulators and state gaming authorities will have to approve.
And Caesars has had growing pains before. It partnered with Suffolk Downs to compete for a license in Massachusetts, but the gaming commission turned them down.
Roll of the Dice
Still, investors are ready for another roll of the dice.
"Everyone knows that without a CEO, Caesars is in play," a source told the New York Post.
Shares of both companies were both down slightly in trading after the news broke. MGM shares are down more than 15 percent so far this year, and Caesars shares are down more than 20 percent.