Penn National Gaming recently announced it will purchase Prairie State Gaming, a slot machine route operator based in Illinois, for an undisclosed, all-cash sum. The transaction will give Penn National more than 1,100 slot machines in 270 locations around the state. In the fiscal year ending June 30, Prairie State Gaming was one of the top five route operators in the state with nearly million in EBITDA.
Under Illinois law, since 2012 businesses with liquor licenses can operate slot-like video lottery terminals managed by a route operator. As of June, Illinois had 20,730 gaming terminals at 4,965 establishments, according to the Illinois Gaming Board. Fantini Gaming Research said the VLTs now compete with Illinois casinos; last month the machines generated $72.8 million in revenue, compared to casinos’ $118.1 million.
Penn National Chief Operating Officer Jay Snowden said, “The planned acquisition of PSG is consistent with our proven long-term strategy for growth through accretive acquisitions.” The acquisition will give Penn National a share of the emerging cafe market, which some analysts said now totals 40 percent of all Illinois ambling revenue.
Penn National owns three casinos in Illinois, and recently spun off about 20 casinos to its real estate investment trust, GLPI. The company owns M Resort in Henderson, Nevada and is in the process of purchasing Tropicana Las Vegas for $360 million.
