Casino operator Penn National Gaming (PNG) has bought its way into Maryland’s gambling market ahead of that state’s expected legalization of sports betting.
On Tuesday, PNG announced that it had reached a deal with its real estate investment trust (REIT) Gaming & Leisure Properties Inc (GLPI) to acquire the operations of Hollywood Casino Perryville in the Maryland city of the same name. The $31.1m cash deal is expected to close in mid-2021 subject to standard regulatory approvals.
The Perryville property was the first casino to open in Maryland way back in 2010 with none other than PNG at the helm. But PNG unloaded the property to GLPI during the 2013 corporate restructuring that saw PNG spin off its real estate assets into GLPI. The parties reached a deal this spring that gave PNG the option to (re)acquire Perryville’s operations at a future date.
Under the new arrangement, PNG will pay GLPI an initial annual rent of around $7.77m for the Perryville property. PNG’s new lease will run for an initial 15-year term, with options for four five-year extensions.
The deal will bring PNG’s US presence to 20 states, and another state in which PNG’s Barstool Sportsbook sports betting brand can take root, pending the state’s expected legalization of wagering sometime next year.
In November, Maryland voters overwhelmingly approved a ballot referendum to legalize betting, but state politicians will first have to craft enabling legislation, after which the Maryland Lottery and Gaming Control Commission will need to develop the necessary regulations. So for all we know, betting may still be in the planning stages this time next year.
Regardless, PNG CEO Jay Snowden said Maryland had the potential to become a “significant retail and mobile sports betting market,” one in which Barstool will compete with rival platforms operated by other local casino licensees, including BetMGM, Churchill Downs Inc’s BetAmerica and Caesars Entertainment’s William Hill, along with any number of mobile-only operators.
Meanwhile, GLPI also announced a deal to sell the operations Louisiana’s Hollywood Casino Baton Rouge (HCBR) to Casino Queen Holding Company Inc. The $28.2m deal will also see GLPI enter into master lease with Casino Queen that will see the latter pay annual rent of $21.4m for both HCBR and the DraftKings at Casino Queen property in East St. Louis, Illinois.
Casino Queen’s Illinois property entered into a naming rights deal with sports betting operator DraftKings this summer to help the latter firm enter the state’s wagering market under its own brand. Casino Queen also operates the Casino Queen Marquette in Iowa and recently acquired the operations of Louisiana’s Belle of Baton Rouge casino from Caesars Entertainment.