Penn National Acquires Operations of Hollywood Casino in Perryville

Penn National Gaming
Penn National announced on Tuesday that it has reached an agreement with Gaming and Leisure Properties Inc. to acquire the operations of the Hollywood Casino in Perryville for $31.1M.

The regional casino operator will pay for the transaction in cash and it will also lease the property from GLPI for $7.77M per year. The deal is expected to be completed in the middle of 2021 but pending the approval of the Maryland Lottery and Gaming Commission. Once consummated, Penn National will have operations in 20 states throughout the United States.

Said Penn National President and CEO Jay Snowden:

“With the recent approval of sports betting through the overwhelming passage of Question 2 on Election Day, Maryland is expected to soon become a significant retail and mobile sports betting market.”

Maryland Legal Sports Betting

During last month’s elections, Maryland voters favored legal sports betting in the state by a margin of about 2 to 1. The vote enabled the Old Line State to join neighbors Delaware, Pennsylvania, West Virginia, and the District of Columbia as states which have legalized sports betting since the U.S. Supreme Court repealed the 1992 Professional and Amateur Sports Protection Act.

With the people’s approval, the onus is now with Maryland’s General Assembly to develop and approve the structure for Maryland legal sports betting. The structure would outline among others which businesses can apply for a license, how and where fans could place bets, and how the revenues would be shared between the state and operator. Once the rules are finalized and legislation is enabled, state analysts expect Maryland legal sports betting to generate an annual revenue of $18.2M for the state for both in-person and online sports betting if operations are taxed at 20%.

Part of April Deal with GLPI

The Perryville Hollywood Casino was actually developed by Penn Gaming in 2010. GLPI assumed ownership of the Perryville property in 2013 when Penn National split its casino operations from its real estate business. Last April, Penn struck a deal with GLPI to sell Tropicana Las Vegas for $305.7M in rent credits. The agreement allowed Penn to retain operations of the Strip resort and it was given the right to acquire Hollywood Casino in Perryville.

Penn operates 41 properties in 19 states while offering retail and online gaming, live racing, and sports betting entertainment. Its casinos and hotels have an aggregate 50,000 gaming machines, 1,300 table games, and 8,800 hotel rooms operating under brands such as Ameristar, L’Auberge, and Hollywood.

Hollywood Casino To Change Its Name to Casino Rogue

Louisiana State Flag With a Casino Background
Hollywood Casino will be renamed as Casino Rogue after the completion of its new casino building on land in 2022.

The East Baton Rogue Parish Planning Council will consider site plans in a meeting on Monday. If all goes well according to plan, construction will begin in early 2021 with 166 construction jobs created and a labor spend of $10M.

$25M Expansion

To move the Louisiana casino to land, the owners of Hollywood Casino are embarking on a $21-$25M expansion to its dockside facility while turning the valet parking to an indoor gaming space. The riverboat casino’s 859 slot machines and 12 table games will move into the new 100,000-square-foot-casino.

The expansion plans include the addition of a sports bar and a 250-seat entertainment venue as well as a Shaquille O’Neal Big Chicken Restaurant. The NBA Hall of Famer played college ball at LSU in Baton Rogue. Since East Baton Rogue voters already approved sports betting last month, Hollywood Casino is expected to take advantage by establishing a sports betting shop in the sports viewing area and bar.

Plans To Move To Land

Gaming and Leisure Properties, Inc., the owners of Hollywood Casino based in Wyomissing, Pennsylvania, have been planning to move Hollywood Casino to land since 2018. That year, Gov. John Bel Edwards signed a bill that allowed the state’s 15 casinos to move to land, with the catch that the land-based venues must be conducted within 1,200 feet of the original docking site.

For the fiscal year ending last June 2020, the Louisiana casino had an adjusted gross revenue of $43.1M. The amount is much lower than the $55.1M it brought in over the same period in 2019 with this year’s figures taking a hit due to the pandemic. For the month of October 2020, it generated $4.1M which is slightly lower than the $4.3M it picked up in October 2019.