Operations only, GLPI keeps property
Penn National Gaming has announced that it is acquiring the operations of Hollywood Casino Perryville in Maryland from Gaming and Leisure Properties, Inc. (GLPI) for $31.1m cash. Penn will then lease the property from GLPI for $7.77m per year.
plans to launch both a Barstool Sports-branded retail sportsbook and mobile app
The transaction marks Penn National’s entry into the Maryland gaming market, the 20th state in which the company will have a presence. The ultimate goal for Penn National may not be the brick-and-mortar casino, but the sports betting opportunity in Maryland. In Tuesday’s announcement, Penn’s president and CEO Jay Snowden said that his company plans to launch both a Barstool Sports-branded retail sportsbook and mobile app.
GLPI also announced that it has sold the operations of Hollywood Casino Baton Rouge to Casino Queen Holding Company for $28.2m. It will lease the property, as well as DraftKings Casino Queen in St. Louis, back to Casino Queen for $21.4m per year.
With the sale of the Perryville and Baton Rouge gaming operations, Gaming and Leisure no longer operates any of the casinos it owns.
Looking toward sports betting
As mentioned, Penn National’s primary impetus for making this casino deal is likely the fact that it gives the company access to Maryland’s sports betting market. In the November election, Maryland residents approved a referendum to legalize sports betting. The state legislature still needs to pen the regulations, which will not happen until lawmakers return to work next year. Industry insiders believe that sports betting could go live by the fall.
The reason Penn National needed Hollywood Casino Perryville is because if the licensing rules end up mirroring previous legislation in the state, licenses will be limited to Maryland’s casinos, racetracks, and the Washington Football Team’s stadium. It is possible the company could have partnered with a casino, but this is the more direct route.
The future sportsbook, both live and online, will use the Barstool brand. Penn National bought 36% of Barstool in early 2020.
Pushing through 2020
Like many casino operators, Penn National has had a rough go of it this year because of the COVID-19 pandemic. The first quarter of 2020 was especially difficult, as the company posted a net loss of $608.6m on $1.12bn in revenue.
sold the land that Tropicana Las Vegas is on to GLPI for $337.5m in rent credits
To stanch the bleeding somewhat, Penn sold the land that Tropicana Las Vegas is on to GLPI for $337.5m in rent credits. It will continue to operate the Trop for two years or until GLPI sells it. Penn National only just bought the Tropicana in 2015 for $360m.
While its brick-and-mortar business has had trouble, Penn National has been expanding its sports betting operations, signing a number of partnerships this year. Additionally, it has opened a retail sportsbook in Colorado and has launched its Barstool Sportsbook app in Pennsylvania.