Penn National, eying Maryland online gaming space, buys back Hollywood Casino Perryville - Delaware Business Now
Monday 21st December 2020
Penn National Gaming, Inc. is getting its old casino back, thanks in part to online gambling.
The Pennsylvania-based casino operator entered into a definitive agreement with Gaming and Leisure Properties, Inc. to acquire the operations of Hollywood Casino Perryville, MD for $31.1 million in cash, subject to working capital adjustments.
Gaming & Leisure was spun off from Penn National as part of a trend by casino operators to separate gaming and casino real estate.
With the closing of the transaction, Penn National will enter into a lease with GLPI for the real estate assets associated with the Hollywood Casino Perryville facility with an annual rent of approximately $7.77 million.
The Hollywood Casino was the first out of the gate in 2010 when Maryland authorized gaming, but ran into an increasingly saturated market and a location for Baltimore-area residents that came with bridge tolls on Route 40 and Interstate 95.
Later on, casinos popped up in the Baltimore-Washington area, although the state used a revenue-sharing formula to aid Hollywood.
Casinos have reopened in Maryland but face capacity limits and an older customer base that may be reluctant to venture out during the Covid-19 pandemic.
The Perryville location is near a planned $200 million Great Wolf resort. There has been no recent word on the status of the project.
A big reason for re-entering the Maryland market is the ability for Penn National to tap into the lucrative online gaming space.
"...with the recent approval of sports betting through the overwhelming passage of Question 2 on Election Day, Maryland is expected to become significant retail and mobile sports betting market. As such, this acquisition provides another opportunity to expand our unique omnichannel platform with a Barstool-branded retail sportsbook and mobile app," said Jay Snowden, Penn National CEO.
The transaction is expected to close in mid-2021, subject to the Maryland Lottery and Gaming Control Commission's approval and other closing conditions.
In February, Penn National entered into a strategic partnership with Barstool Sports. Barstool promotes the company's land-based and online casinos and sports betting products, including the Barstool Sportsbook mobile app, to a national audience.