Deal to close in second half of 2021
Casino Queen Holding Company Inc. has announced a $28.2m deal with Gaming and Leisure Properties Inc. (GLPI) for the purchase of Hollywood Casino Baton Rouge (HCBR) in Louisiana. The acquisition comes less than two weeks after the Midwest-based riverboat operator said it would buy the Belle of Baton Rouge from Caesars Entertainment Inc.
Subject to regulatory compliance and other routine closing conditions, the transaction’s expected date of completion will be in the second half of 2021.
Under the reworked lease agreement, Wyoming-based real estate investment trust GLPI keeps the real estate for HCBR. GLPI also entered a master lease with both the HCBR facility and Casino Queen’s East St. Louis property for initial cash rent of around $21.4m per year. The lease terms are 15 years with four five-year extensions.
Over the following two years, GLPI also holds the right of first refusal with Casino Queen for any other sale leaseback agreements under $50m.
Casino monarch of Baton Rouge
Casino Queen’s purchase of HCBR means it now owns two of the Louisiana capital’s three casinos, following its December 1 acquisition of the Belle of Baton Rouge from Caesars.
sports betting coming on, along with traditional gaming”
Casino Queen president and chief executive officer Terry Downey said the deal allows the company to grow its footprint across Baton Rouge. Casino Queen boasts a solid customer offering “with sports betting coming on, along with traditional gaming,” he concluded.
According to The Advocate, Louisiana Gaming Control Board chair Mike Noel noted that while owning multiple casino operations “in the same market” is not unusual, the Casino Queen’s latest deals may give rise to “questions we need to dig into.”
Selling, relocating, keeping an interest
The chairperson and chief executive officer of GLPI, Peter Carlino, said the sale of the Baton Rouge operation was “bittersweet”, given its important contribution to the formation of the investment trust.
GLPI will go ahead with plans to move the downtown Baton Rouge casino onto land. According to a news release, it will then adjust rent under the master lease “to reflect a return of 8.25% on its project costs”.
GLPI keeps a vested interested in the gaming property’s future
By keeping the Baton Rouge real estate and setting up the casino operation on land, GLPI keeps a vested interested in the gaming property’s future.
Carlino added that the HCBR property will be in “good hands” and “will continue to shine” under Casino Queen. He also indicated that GLPI’s divestiture move to focus on its core business does not rule out future “compelling” possibilities to run gambling operations.