A casino purchase deal first announced in November has finally made progress. The Greektown Casino in Detroit, Michigan will successfully change hands from Jack Entertainment to a partnership between Penn National and VICI Properties, a real estate investment trust that was started by Caesars Entertainment. The sale was worth $1 billion and is a plus for both Penn National and Jack Entertainment owner Dan Gilbert.
The Michigan Gaming Control Board (MGCB) authorized the sale this past Tuesday. Penn will pay $300 million for the rights to operate the venue, while VICI will purchase the property itself for $700 million. VICI has already scooped up a number of casino properties across the country under similar deals and now owns 22 casinos. The $1 billion will be paid in cash and the deal is expected to be finalized today. It has already been approved by the city of Detroit, as well as the Federal Trade Commission.
Penn has been on an expansion for the past year and has been looking at a number of solutions in the United States that would provide it with more liquidity. The challenge, of course, is how to improve liquidity when having to make massive outlays, and this conflict has been shown in the company’s revenue reports.
Gilbert stands to walk away with some nice pocket change. He purchased the casino in 2013 when it was hemorrhaging serious amounts of cash and had been in bankruptcy from 2008 to 2010. After his acquisition, things turned around and the casino reported revenues of $29.3 million this past April. It may be third in line among Detroit’s casinos, but Gilbert paid $600 million for the purchase. $400 million in gross returns isn’t a bad deal.
Gilbert might be ready to slow things down. He founded Quicken Loans and is the owner of the Cleveland Cavaliers of the NBA, as well as Jack, but has recently been looking to downsize. Jack announced last month that it would sell The Turfway Park horse track in Kentucky and the Jack Cincinnati Casino in Ohio to Hard Rock International in a deal reportedly worth $780 million.