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JACK sells Greektown to Penn National

Discussion in 'Casino Industry & Development' started by zoobrew, Nov 14, 2018.

  1. zoobrew

    zoobrew High-Roller

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    DETROIT (AP) — Businessman and Cleveland Cavaliers owner Dan Gilbert has reached a $1 billion agreement to sell the Greektown Casino-Hotel in downtown Detroit, one of the city's three casinos, companies involved in the deal announced Wednesday.

    Gilbert's Detroit-based JACK Entertainment said it planned to sell the casino to Pennsylvania-based Penn National Gaming and New York-based VICI Properties. The deal requires state and federal regulatory approval. JACK Entertainment said it's also "continuing a strategic assessment for its remaining gaming properties" in other states.

    Gilbert bought Greektown Casino-Hotel more than five years ago. Under the sale agreement, Penn National will acquire the operating assets of Greektown for about $300 million and VICI Properties will acquire the land and real estate assets for about $700 million.

    In a statement, Gilbert and his companies said they plan to use some proceeds from the sale for investment in Detroit real estate and business development. Gilbert already has a major real estate presence in Detroit and has been a key player in the revitalization of the city's downtown.

    The sale, he said, "will allow that strong trajectory to continue and provide additional capital to continue our strategic investments in our Detroit real estate and business initiatives."

    The sale is expected to be finalized in 2019. During the sale process, plans call for the casino and hotel to remain open. JACK Entertainment said Greektown employees are expected to get compensation and benefit packages at least at current levels.

    Penn National owns, operates or has ownership interests in dozens of gambling and racing facilities around the country. JACK Entertainment also owns and operates such properties in Cleveland, Cincinnati and Baltimore as well as racing facilities in Ohio and Kentucky.

    http://www.newschannel6now.com/2018/11/14/cleveland-cavaliers-owner-selling-detroit-casino-b-deal/
     
  2. zoobrew

    zoobrew High-Roller

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    I thought Jack would sell all the casinos as a package, but maybe they will get a better deal if sold individually. I am still hoping Jack sells Cleveland to CET.
     
  3. Emerson

    Emerson Low-Roller

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    I am so glad that Caesars did not buy it and pull out of Windsor.
     
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  4. The Rumor

    The Rumor VIP Whale

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    may also make sense to split the sales for antitrust/regulatory reasons. E.g. Ohio may not want Penn (Hollywood) to take over the Jack properties, given how many casinos they already own in the state.
     
  5. hammie

    hammie VIP Whale

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    This is an interesting development in that VICI is buying Jack and in turn, leasing it to Penn.

    Penn National was the first major Casino company spin off its real estate into a REIT, Gaming and Leisure Properties, Inc. back in 2013. MGM, then CET followed this example. In the case of CET, the REIT is named VICI Properties, so they are leasing it to a “competitor”, Penn National.

    For what it’s worth, Gaming and Leisure Properties recently bought the Tropicana In Atlantic City and is leasing it to Eldorado Resorts to operate. It’s one of 5 properties owned by GLPI and leased to Eldorado.
     
  6. rgrif57

    rgrif57 High-Roller

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    Caesars couldn’t buy Greektown while managing Caesars Windsor so apparently Penn National grabbed it before any bidding war started, if Caesars lost Windsor. Detroit has a 50 miles radius clause so no casino can have 2 in the same area.
    Talking with our host he said the contract is up in 2020 so this pressures Caesars now if they want to stay in the Michigan/Ontario market. Interesting.
     
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  7. The Rumor

    The Rumor VIP Whale

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    Probably helps them argue these have all been arms length transactions. Makes a lot of sense to see which REIT will pay the most for the underlying capital asset.
     
  8. Champster1

    Champster1 VIP Whale

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    Didn’t Caesars own Jack (Horseshoe) before it became Jack?
     
    Last edited: Nov 16, 2018
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  9. rgrif57

    rgrif57 High-Roller

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    Dan Gilbert owns Cleveland and Cincinnati casinos but they were managed by CET.
    CET sold back the management to Dan G a couple of years ago.
     
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  10. grumpy23

    grumpy23 Tourist

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    Dan Gilbert bought out CET a few years back. Bad move by him, northern Ohio had many, many, many, total reward members who piled up points that led to the many perks you received in LV. If I remember right, it was the top casino in Ohio at the time. Now the casino, managed by Jack is at or near the bottom of the list. Gilbert is shopping his Jacks locations in CLE which includes his Racino at Thistledown Horse Racing track in suburban North Randall. Not sure if he has a connection to any LV area casinos for rewards or not.

    On the wishful thinking of CET buying his interests in CLE - just heard this past week, not sure how reliable, but CET pulled out @ "concerns of the building the casino is in". Gilbert had announced plans he was going to build an adjacent casino next to where the present one was now. Within the last year or so those plans are dead.

    Right now the top casino in Ohio is the Rocksino in Nothfield, Ohio. It is a Racino. Just recently sold to MGM who just announced this week the name Rocksino will be changed to something MGM. It is a very nice place and tends to be busy most nights and weekends!
     
  11. zoobrew

    zoobrew High-Roller

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    One of the advantages that CET had before as manager of CLE was that Gilbert owned the Ritz, so a nice hotel was available for players, also who owns the parking garage that most patrons used is also important. I still see CET wanting some presence in Ohio, so I bet they will find some property to buy.
     
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  12. grumpy23

    grumpy23 Tourist

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    Just all rumors now, but I still say CET would be the perfect buyer. But the situation in Detroit it seems, the way I read it, is Penn and CET or spin offs are working together.

    The other thing that goes along with this is Gilbert's NBA team. Has made some questionable moves since winning the NBA title in '16. Firing, not renewing competent GM, trading Kyrie. Look it up. Loosing Lebron, not his fault. He was a free agent, good to do what he wanted. It just seems that the Gilbert does not make sound business decisions with things he really does not understand.
     
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  13. NWAKALUM08

    NWAKALUM08 Tourist

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    To be able to own an NFL I believe you cannot own any casinos. You can invest into them but not run or own. I think Gilbert is planning on trying to take on part of ownership of some NFL team and needs to get rid of his locations. Just my thoughts.