Gaming and Leisure Properties has announced the combined $59.3m sale of the operations of Hollywood Casino Perryville in Maryland and Hollywood Casino Baton Rouge to Penn National Gaming and Casino Queen Holding Company, respectively.
Both transactions are expected to close in the second half of 2021, subject to regulatory approvals and other customary closing conditions.
Via the transaction, PNG, which has praised the market potential that Maryland holds, will take its US casino footprint to 41 properties across 19 states.
Simultaneous with the closing of the $31.1m transaction, GLPI will enter into a new lease with the firm for the real estate assets associated with Hollywood Casino Perryville, for an initial annual cash rent of approximately $7.77m. The lease will have an initial term of 15 years with four five-year extensions.
“Penn National is excited to acquire the operations of Hollywood Casino Perryville, a property we developed in 2010, which will allow us to re-enter the strong Maryland gaming market and add a twentieth gaming jurisdiction to our leading nationwide footprint,” stated Jay Snowden, president and CEO of Penn National.
“In addition, with the recent approval of sports betting through the overwhelming passage of question two on election day, Maryland is expected to soon become a significant retail and mobile sports betting market.
“As such, this acquisition provides another opportunity to expand our unique omni-channel platform with a Barstool-branded retail sportsbook and mobile app.”
Furthermore, the real estate investment trust has also detailed the $28.2m divestment of Hollywood Casino Baton Rouge to Casino Queen Holding Company.
GLPI will retain ownership of all real estate assets at HCBR and will simultaneously enter into a master lease with Casino Queen, which will also include both the DraftKings at Casino Queen property in East St Louis,, for initial annual cash rent of approximately $21.4m. The lease will have an initial term of 15 years with four five-year extensions.
In conjunction with the transaction, GLPI will also have a right of first refusal with Casino Queen for other sale leaseback transactions up to $50m over the next two years.
Casino Queen is a regional gaming company owned by Standard General that owns, or is under contract to buy, four casinos across three states, and is focused on further expanding its casino and sports betting operations.
Peter Carlino, chairman and CEO of GLPI, commented, “The sale of our operations in Baton Rouge and Perryville is bittersweet as both properties were foundational to the creation of GLPI seven years ago.
“We are grateful to the team members who do an amazing job managing these properties and delivering great guest entertainment and amenities, particularly in the face of the challenges brought on by the pandemic.
“We are confident that they are in good hands with the new operators of these properties and will continue to shine under Penn National and Casino Queen. By retaining the real estate of both Perryville and Baton Rouge, and continuing the development on the expansion in Baton Rouge, we retain a vested interest in their future.
“Finally, while we have decided to divest these operations to focus on our core business, our institutional knowledge and ability to operate gaming facilities at a high level remain intact should a compelling opportunity arise in the future.”