Pinnacle Entertainment is entering the Pennsylvania market following state regulatory approval for the company to operate the Meadows Racetrack and Casino outside of Pittsburgh.
NYSE-listed Pinnacle will assume full control of gaming and entertainment at Meadows on a long-term lease from Gaming and Leisure Properties Inc., which acquired the business for $440 million in 2014 from Cannery Casino Resorts.
Pinnacle will pay an initial annual rent of $25.4 million to GLPI in what’s known as a triple-net lease, where the tenant also pays the taxes, insurance and maintenance costs.
The total transaction is valued at $138 million.
Pinnacle’s first foray into the $3 billion Pennsylvania market brings its casino count to 16 in 10 states, though now solely as an operator. Last year, the company sold its casino real estate to GLPI in a highly publicized deal worth $4.75 billion.
GLPI, which was spun off by Penn National Gaming in 2013 as a separately managed and traded real estate investment trust, has 35 gaming and gaming-related properties in 14 states. The company also owns and operates Louisiana Casino Cruises’ Hollywood Casino Baton Rouge and Penn Cecil Maryland’s Hollywood Casino Perryville.
The Meadows, one of five casinos in western Pennsylvania, generated $290 million in net revenues and $48 million in EBITDAR in its most recent fiscal year. The property features a harness racetrack and grandstand and a gaming floor with 3,200 slot machines, 74 table games and 11 poker tables. A bowling alley, an array of restaurants, banquet facilities and an events center round out the attractions.
