Another leaseback deal
Penn National Gaming has announced that the Maryland Lottery and Gaming Control Commission has approved its acquisition of the operations Hollywood Casino Perryville. The company entered into the deal with Gaming and Leisure Properties, Inc. (GLPI) in December 2020.
we are thrilled to be re-entering the Maryland market at a property we developed in 2010”
“We are thrilled to be re-entering the Maryland market at a property we developed in 2010 as it will add a twentieth gaming jurisdiction to our already leading nationwide footprint,” said Penn National president and CEO Jay Snowden on Thursday.
Penn National is paying GLPI $31.1m cash and will lease the property from GLPI for $7.77m per year.
Looking toward sports betting
While operating Hollywood Casino Perryville is exciting, Penn National’s primary objective may have been to get into Maryland’s sports betting industry. In fact, Snowden talked about it in Thursday’s press release, saying: “….we’re equally excited to be entering this market following the legalization of sports betting in Maryland a few weeks ago. This acquisition provides another opportunity to expand our unique omni-channel platform with a Barstool-branded retail sports book and mobile app.”
Maryland Governor Larry Hogan signed a sports betting bill into law on May 18, so it wasn’t exactly “a few weeks ago,” but Snowden’s enthusiasm can be forgiven. State residents voted in favor of sports betting on a November ballot referendum and the legislature passed the bill in April.
Penn National just took a shortcut to the state’s sports betting market
The state is poised to have one of the most active sports betting markets in the country, as lawmakers crafted regulations that authorize around 100 combined retail and online sports betting licenses. Ten licenses are earmarked for Maryland’s casinos, so Penn National just took a shortcut to the state’s sports betting market instead of having to partner with a casino.
Putting the “National” in Penn National
Penn National Gaming has been in expansion mode in the last several years. In 2017, the company bought the operations of Bally’s Casino Tunica and Resorts Casino Tunica and then leasied the properties from GLPI, as it tends to do.
2018 was Penn National’s biggest splash, as it purchased Pinnacle Entertainment for $2.8bn. Pinnacle had to sell four properties to Boyd Gaming to satisfy regulators. Penn National netted a dozen casinos out of the deal, leasing them all from GLPI.
The following year, it bought the operations of Margaritaville Resort Casino in Louisiana and Greektown Casino-Hotel in Detroit, while VICI Properties bought the real estate and leased it back to Penn National.
Penn National made another massive move in early 2020, acquiring a 36% stake in Barstool Sports for $163m with the option to up the portion to control or full ownership within three years. Penn National’s sportsbooks are Barstool-branded.
The COVID-19 pandemic hit Penn National hard, forcing it to sell the land on which the Tropicana Las Vegas stands to GLPI for $337.5m in rent credits. GLPI sold the Tropicana’s non-land real estate to Bally’s in April.