Billionaire investor Carl Icahn is all but exiting the casino industry, selling his stake in Tropicana Entertainment for $1.85 billion. But maybe Eldorado Resorts (NASDAQ:ERI) -- which will operate the properties bought by real estate investment trust (REIT) Gaming & Leisure Properties (NASDAQ:GLPI) -- shouldn't be going all in.

Eldorado may be piling too much onto its plate, having also purchased Isle of Capri Casinos last year for $1.75 billion and making a small tuck-in acquisition of an Illinois casino at the same time as the Tropicana deal.

Couple playing craps

Image source: Getty Images.

A rise to prominence out of bankruptcy

Icahn Enterprises (NASDAQ:IEP) bought Tropicana in 2008 during the collapse of the financial markets. In 2010, Tropicana emerged from bankruptcy protection under a $200 million deal brokered by Icahn, which gave him control of eight casinos in Indiana, Louisiana, Mississippi, Nevada, Missouri, New Jersey, and Aruba. The Aruba resort is not included in the current deal, but will be sold at a later date.

The famous Tropicana Las Vegas resort is also not part of the deal, as it is owned by Penn National Gaming. It acquired the casino in 2015 from private equity firm Onex, which -- along with a group of investors -- had bought it at the same time Icahn acquired the rest of the Tropicana portfolio.

Icahn is selling six of the eight Tropicana properties to Gaming & Leisure for $1.21 billion, with Eldorado kicking in $640 million to lease and operate the resorts. The REIT was created by Penn National in 2013 to burnish its growth image by taking the burden of owning property off of its balance sheet, and has grown from its original portfolio of 21 properties to 38 gaming and related facilities today. When Penn completes its acquisition of Pinnacle Entertainment, two more properties will be added.

When all these transactions are completed, Gaming & Leisure Properties should own 46 gaming facilities, which will allow it to continue being the third largest publicly traded triple-net-lease REIT. A triple-net REIT means the tenants -- in this case the actual casino operators -- agree to pay all real estate taxes, building insurance, and maintenance on the properties.

Eldorado sees gold in growth

The third leg in the sale of Tropicana is Eldorado Resorts, a $2.8 billion regional casino operator with 20 properties in 10 states featuring approximately 21,000 slot machines and video lottery terminals, 600 table games, and over 7,000 hotel rooms. The Tropicana properties will add 7,900 slot machines, 265 table games, and 5,400 hotel rooms to its operations.

In addition to leasing the Trop portfolio, Eldorado also announced it was buying the Grand Victoria Casino in Elgin, Illinois, for $328 million in cash. Eldorado described that transaction as part of its "ongoing efforts to bring additional scale to our portfolio base while creating new opportunities for growth and value for our shareholders." But it could easily say the same about the Tropicana deal, as the Trop properties are all top-notch, with some being the best performing in their respective locations.

Although the market liked the deal and sent Eldorado's stock soaring 16% on the news, it creates a lot of moving parts for the casino operator, which is still in the early stages of integrating the Isle of Capri properties it acquired almost a year ago.

A hot hand turned cold?

Eldorado's COO Anthony Carano said during the casino operator's fourth-quarter earnings call that although it has already achieved the $35 million in synergistic savings it previously identified from the Isle of Capri deal, it was still figuring out how best to optimize the assets.

A sale of the Isle of Capri Lake Charles resort in Louisiana last year fell through after the buyer failed to obtain a gaming license, but Eldorado has since entered into agreements to sell two other resorts to Churchill Downs this year.

Growth by acquisition can immediately expand a buyer's reach, but it's rarely a process that runs smoothly and according to plan. Shares of Eldorado Resorts have more than doubled over the past year, meaning its shares no longer trade at the attractive valuation they did previously.

Adding the half-dozen Tropicana resorts to its portfolio will burnish its reputation as a leading regional gaming company, putting it on par with Penn National and Boyd Gaming. But the hot streak its stock has been on may very well turn cold. Investors may want to walk away from the game until Eldorado Resorts shows all its cards.