Grubhub continues feeding frenzy, buys Eat24

Grubhub Inc. is gobbling up its smaller competitors.

On Thursday, the company said it would buy Eat24 from Yelp Inc. for $288 million in cash, well over twice the $134 million Yelp paid for the smaller food delivery company when Yelp bought it in February 2015. Grubhub and Yelp are also agreeing to a five-year partnership that will see Yelp integrating GrubHub ordering into its own restaurant listings.

The move mirrors a deal that Grubhub announced with Groupon earlier this week, when it bought Groupon’s ordering platform, Orderup, which operated in 27 cities, focused mostly on college campuses. In June, Grubhub also bought Foodler, a Boston-based online delivery service. Terms for those deals weren’t released.

For Yelp and Grubhub, the partnership means access to more people placing orders, says Matthew Maloney, Grubhub’s CEO. “The Groupon deal is similar in form but nowhere near in size and scale to this deal,” he says. “It’s going to be huge for both companies.” Eat24 has about 40,000 restaurants on its platform, compared with some 55,000 for Grubhub. Many restaurants use both platforms; the combined entity will have about 75,000 restaurants. The companies say there is far less overlap when it comes to users.

Grubhub has always had an appetite for acquisitions. In addition to the deals in the past few months, it has purchased about a half-dozen smaller competitors over the years. It also merged with its main rival, Seamless, shortly before going public in 2014.

That deal drew scrutiny from New York Attorney General Eric Schneiderman, who was concerned about a local monopoly in food delivery; the combined company eventually calmed those fears by agreeing not to lock restaurants into exclusive delivery deals.

casinos, reported a loss Thursday of $1.4 million, or $9.68 a share, on $1 billion of revenue. A year earlier, the company had a loss of $2 million, or $13.25 a share, on revenue of $992 million for the quarter that ended June 30.

Cash flow remained unchanged at $289 million for the quarter.

“In the second quarter, stronger gaming fundamentals across most of our properties were offset by expected unfavorable year-over-year hold, primarily in baccarat, and the impact of more hotel rooms off the market for renovation,” Mark Frissora, president and CEO, said in a statement accompanying the release of quarterly results.

In a conference call with investors, Chief Financial Officer Eric Hession said the baccarat downturn of

$41 million was a result of above-average play in 2016 compared with lower hold in 2017.

Revenue also dipped as a result of Las Vegas hotel rooms being offline during renovation projects. The company reported 1,132 rooms currently being renovated at Caesars Palace, 950 at Harrah’s Las Vegas and 410 at Harrah’s Laughlin. A project that includes 1,270 rooms at Flamingo and 2,068 at Bally’s has been pushed back to a 2018 completion. Companywide, there will be about 6,000 room renovations completed by the end of 2017.

Emerging from bankruptcy

As the company emerges from bankruptcy — a process slated to be CAESARS

one-page version is the inclusion of policies on all forms of mobile and interactive gaming, as well as land-based casinos. The new code also includes new consumer protection measures with enhanced transparency on casino game odds and payouts as well as ensuring that advertising and marketing don’t misrepresent the probability of winning.

But the code enhancement is not without its challenges.

An estimated 10 percent of the commercial casino industry and 67 percent of tribal casinos aren’t gaming association members, but Elizabeth Cronan, the association’s senior director of gaming policy, said most nonmembers follow its policies.

There’s nothing to force casinos to observe the code, and evolving technology moves faster than policies can keep up.

The association has pledged to provide data for universities to continue research on compulsive gambling. Researchers have found

that policy changes occasionally have unintentionally backfired and made a problem worse.

An effort to slow down the spinning

reels of slot machines to slow play and give patrons “a breather” resulted in gamblers playing longer instead in Australia, UNLV International Gaming Institute Director Bo Bernhard said during the panel discussion.

There also are skeptics who believe casino companies are incapable of turning away players who might be compulsive.

Control Board member and panelist Terry Johnson said Nevada gaming regulators are starting discussions about how to spot patrons affected by marijuana use.

The association’s code says casinos should not knowingly serve alcoholic beverages to visibly intoxicated persons nor permit gambling by a visibly intoxicated person. But spotting a patron high on marijuana might prove more challenging.

Johnson said discussions would start this month on several issues related to Nevada’s new recreational marijuana law.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @Rickvelotta on Twitter.