Penn National Gaming Purchases Two New Casinos in MS
Penn National Gaming continues to be a top casino operator, having now acquired two new gaming venues in Mississippi.
To be a successful casino operator, you have to own properties that earn quality revenues and have a good reputation. There are many casino operators located in the United States that have numerous operations around the country as well as abroad. These operators must provide stable environments for gaming, offering only the best in gaming options, player rewards, accommodations, dining, entertainment, etc. To further see success, many such operators, like Penn National Gaming, will purchase more gaming venues to add to their portfolio of operations.
Penn National Gaming’s Latest Purchase
Yesterday, Penn National Gaming announced they have signed a definitive agreement to be the new owners of RIH Acquisitions MS I and II. These are the two holding companies behind the Bally’s Casino Tunica and Resorts Casino Tunica gaming operations. The deal is set to close sometime in the second quarter and must be approved by the Mississippi Gaming Commission to be final.
Reportedly, Penn National Gaming will be paying $44 million for the two casinos, which both saw around $21 million in combined earnings in 2016. The casino market in Tunica has been dealt a tough blow over the past few years due to Hurricane Katrina. When the hurricane took place in 2006, the area began to see a decline, with revenues falling from $1.66 billion in 2006 to just $932 million in 2016.
A Look at the Two Venues
Taking a look at the two casinos, it seems that Penn National Gaming is making a solid investment. Bally’s Casino Tunica has 947 slot machines and 16 table games. There are restaurants on site and a live entertainment venue where performers can offer shows and concerts. At the Resorts Casino Tunica, the facility features 800 slot games and nine gaming tables with restaurant dining, meeting and event space along with a hotel that has 201 guest rooms.
The new deal is being done in correlation with Gaming and Leisure Properties, which is a real estate investment trust that currently owns the land where the gaming venues of Penn National Gaming reside. The two properties will be leased to Penn from Gaming and Leisure Properties for $9 million a year.
Penn National Gaming has worked in Tunica before as they own the Hollywood Casino Tunica. Penn has 27 properties located across the United States and Canada, and have great experience in operating gaming facilities. The company owns the Tropicana Las Vegas and just last year decided to begin offering online social gaming via Rocket Games, once they purchased the development company.
According to CEO of Penn Tim Wilmott, the ‘tuck-in transaction’ will help to build the existing presence of the company in Tunica. All three properties will be able to benefit from a centralized local management structure with Penn making modest cap-ex investments with the two new properties to help elevate the guest experience, implementing the Marquee Rewards program as part of the changes.
In 2016, Penn National Gaming reported overall revenues of $3.03 billion which is quite a bit more than the $2.83 billion earned in 2015. It will be interesting to watch as the company makes changes to the Tunica venues and hopefully they will be able to help bring about a positive change to the gaming region. We shall see in the coming months how Penn makes changes to the venues and how the new ownership is received by visitors to the gaming city.