Regional casino operator Penn National Gaming (PNG) has struck a deal to acquire two more Mississippi gaming venues.
On Tuesday, PNG announced it had entered into a definitive agreement to acquire RIH Acquisitions MS I and II, the two holding companies for the gaming operations at Bally’s Casino Tunica and Resorts Casino Tunica. The deal is expected to close sometime in Q2, subject to approval by the Mississippi Gaming Commission.
PNG said it will pay $44m for the two casinos, which generated combined earnings of around $21m last year. The Tunica casino market has had a rough ride since Hurricane Katrina blew through the area in 2006, with total revenue falling from $1.66b that year to just $932m last year.
Bally’s Casino Tunica features 947 slot machines and 16 table games, along with restaurants and a live entertainment venue, while Resorts Casino Tunica has 800 slots and nine tables, plus restaurants, 18k-square feet of meeting and event space and a 201-room hotel.
The deal is being done in tandem with Gaming and Leisure Properties (GLPI), the real estate investment trust that own the land on which PNG’s gaming venues reside. PNG will lease the two Tunica properties’ real estate from GLPI for a cost of $9m per year.
PNG already has a presence in the Tunica area via its Hollywood Casino Tunica property, one of 27 gaming venues PNG operates across the United States and Canada. The company also owns the Tropicana Las Vegas and last year branched out into online social gaming via the purchase of developer Rocket Games.
PNG CEO Tim Wilmott said the “tuck-in transaction” would build on his company’s existing Tunica presence, with all three properties benefiting from a “centralized local management structure.” Wilmott said PNG would make “modest cap-ex investments” at its two new venues to “elevate the guest experience” and implement PNG’s Marquee Rewards player loyalty program.
PNG reported revenue of $3.03b in 2016, up from $2.83b in 2015, while earnings rose 6% to $844m. Last week, the company raised its financial guidance for Q1 2017 based on “strong broad-based property performance” in the year-to-date.
