Penn National Gaming, Inc. announced that it has entered into a definitive agreement with Gaming and Leisure Properties, Inc., the real estate investment trust created by the operator, to acquire the operations of Hollywood Casino Perryville in Maryland for $31.1 million in cash, subject to certain customary working capital adjustments.
Simultaneous 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 annual rent of approximately $7.77 million.
“Penn National is excited to acquire the operations of Hollywood Casino Perryville, a property we developed in 2010, which will allow us to re-enter the strong Maryland gaming market and add a 20th gaming jurisdiction to our leading nationwide footprint,” said Jay Snowden, president and CEO of Penn National.
“In addition, with the recent approval of sports betting through the overwhelming passage of Question 2 on Election Day, Maryland is expected to soon become a 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.”
The transaction is expected to close in mid-2021, subject to the approval of the Maryland Lottery and Gaming Control Commission and other customary closing conditions.
Covid-19 vaccinations began on December 14, which sent stocks higher in various sectors, including regional casino operators who consider vaccines as a way to eventually overcome restrictions. Shares of Penn National Gaming reached a high of $84.49 per share, up almost 8 percent.
Sports betting is one of the growth areas for Penn, even though its Barstool Sports betting app exists in just Pennsylvania, according to CDC Gaming Reports.
The app produces some 13 percent of all bets in Pennsylvania. Bettors wagered more than $78 million during the app’s initial five weeks. In January, Penn paid $163 million to purchase a 36 percent stake in Barstool and its 66 million followers.
Revenue from Barstool in 2020 could exceed that in 2019 despite the coronavirus pandemic impact on sports, thanks to merchandise sales and podcast ads.
The sports betting app expects to launch in Michigan by early January if not sooner. Penn should turn Barstool customers onto online sports betting and iGaming.
The share price rose more than 191 percent year-to-date, double the gains of any other regional casino operator.
SunTrust analyst Barry Jonas anticipates Penn’s interactive division will become profitable as early as 2021.
