Penn National Gaming sees a future in Michigan.
On Wednesday, the racetrack/casino operator based in Pennsylvania announced a $300 million agreement to take over operations at Greektown Casino-Hotel.
JACK Entertainment will sell its downtown Detroit casino to VICI Properties, which will acquire the land and real estate assets for $700 million. Penn will take over the operational assets to bring the total selling price to a cool $1 billion.
Both transactions are expected to close by mid-2019.
Penn’s gaming portfolio will expand to 41 properties in 19 jurisdictions once the deal is complete. Its primary presence remains, of course, in its home state under the Hollywood brand.
Here is what CEO Tim Wilmott had to say on the upcoming addition:
“The acquisition of the Greektown Casino-Hotel operations from JACK Entertainment will further expand Penn National’s already diverse operating base with a facility that is extremely well-positioned in one of the nation’s largest regional gaming markets.”
A billion dollars will buy you a lot of gambling in Michigan.
With Greektown, Penn will operate the only casino located in the heart of Detroit. The 100,000 square-foot facility comes complete with 2,700 gaming machines, 60 table games and one poker room. Its location also makes it a no-brainer for sports betting, if and when legalized in the state.
JACK, the seller, falls within the empire of sports/business mogul Dan Gilbert. In addition to his 100+ other properties in downtown Detroit, Gilbert also co-owns the Cleveland Cavaliers of the NBA, plus casino interests in Cleveland, Cincinnati and Baltimore.
The Michigan Gaming Control Board (MGCB) must approve the transactions before the deal can be called complete.
You can find the press release here.
There may be some benefit to entering the Michigan gaming market before 2019, and Penn appears to understand that. The Wolverine State is one of a handful looking to pass some form of sports betting legislation next year.
While progress is far from a certainty in 2019, at least one pro-gaming representative was able to survive the November midterm elections.
Rep. Robert Kosowski, who authored and introduced a sports betting bill, was not able to run for re-election due to term limits. Rep. Brandt Iden, however, held off his Democratic challenger in a tight race to retain his seat.
His so-called Lawful Internet Gaming Act would establish the Division of Internet Gaming within the MGCB, charged with oversight of online casinos and online poker. Language in the bill would also permit the MGCB to establish parameters for online sports betting.
H 4926 was referred to the Committee on Government Operations in September, where it stalled.
Expansion of gambling in Michigan is complicated by both commercial and tribal interests. Some existing stakeholders, for example, maintain stubborn reservations about potential cannibalization of existing casinos and the Michigan online lottery.
Bills do not carry over to odd years in Michigan, either. So despite Iden’s measure clearing the House by a comfortable vote of 68-40 in June, the process begins anew next year.
As a silver lining, all but one incumbent representative earned re-election in the midterms. The lower chamber will see some turnover, however, as new faces will fill 45 vacated seats in 2019 — including that of Rep. Kosowski.