Penn National Gaming has agreed to acquire Illinois video gaming terminal (VGT) operator Prairie State Gaming (PSG) in an all-cash transaction.
PSG, also known as Illinois Gaming Investors LLC, operates more than 1,100 terminals at 270 bar and retail gaming establishments throughout Illinois.
In 2009, former Illinois Governor Pat Quinn signed a bill into law allowing video gaming terminals to be offered at any business holding a liquor license, which in the state equates to selling wine by the glass. Thousands of so-called “slot-cafes” have sprung up since then, taking a big bite out of casino revenues. Prairie State Gaming was one of the top five route operators in the state with $10m in EBITDA for the fiscal year that ended June 30.
Penn National Gaming CEO Jay Snowden said that purchasing PSG proved the company’s long-term strategy for growth through acquisitions.
“PSG is one of Illinois’ most respected VGT operators, with a strong track record of regulatory compliance and a reputation for reliable around the clock service backed by one of the industry’s most experienced teams. With its strong financial position, PSG has also distinguished itself in the Illinois VGT industry for its ability to quickly roll out new games to customers,” said Snowden. “Penn National looks forward to adding our nearly two decades of industry leading experience in marketing, player development and operating electronic casino games in highly regulated environments. We believe this acquisition will provide us a solid platform for future growth in the Illinois VGT market and potentially other states where this form of gaming is authorized.”
The transaction, which is expected to be completed later this quarter, is still subject to regulatory and other customary approvals and conditions.
Penn National operates 26 facilities in 17 states featuring approximately 32,000 gaming machines, 760 table games and 3,100 hotel rooms. Penn is also in the process of purchasing Tropicana Las Vegas in a $360mdeal which will give them their first foothold on the Las Vegas Strip.