Penn National Gaming, Inc (NASDAQ: PENN) has acquired operating rights to the Greektown Casino in downtown Detroit as part of a $1-billion sale of the property.
Dan Gilbert, the founder and chairman of Quicken Loans, agreed to sell Greektown Casino for $1 billion. The property will be acquired by real estate investment trust VICI Properties Inc (NYSE: VICI) for $700 million, and the casino will be operated by Penn, which will pay the remaining $300 million.
Why It’s Important
Greektown was opened in 2000 and contains approximately 2,700 gaming machines and 60 table games along with a 400-room luxury hotel and 14,000 square feet of event and catering space.
For the city of Detroit, the purchase is a vote of confidence in the vitality of downtown from one of the leading regional casino operators in the country. Greektown will be one of 41 casinos Penn owns and operates around the country, but it will be its first in the state of Michigan.
“Detroit is undergoing an exciting renaissance as a result of billions of dollars of new investments in the city's residential, commercial, entertainment and cultural center, all of which are driving new residents, businesses, tourists and employment to the downtown area,” Penn CEO Timothy Wilmott said in a statement.
Gilbert's company Jack Entertainment LLC owns and operates five casinos and racetracks in Maryland, Kentucky and Ohio.
While it's been rumored that Gilbert’s sale of Greektown could be part of a plan to acquire the Detroit Tigers, he told the Detroit Free Press no such deal is currently in the works. Gilbert also declined to comment on potential sales of his remaining casino properties.
Penn stock was trading higher by nearly 10 percent at the time of publication Wednesday following the announcement, while VICI shares were up less than 1 percent.
VICI simultaneously announced a 25-million share common stock offering.
Investors will be watching to see if the wave of consolidation in the U.S. regional casino market continues with further acquisitions — and also taking note of further national investments in the Detroit market.
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Disclosure: Dan Gilbert is an investor in Benzinga.
Photo by Santcomm/Wikimedia.
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