Penn National Gaming and VICI Properties announced they will jointly acquire Margaritaville Resort Casino in Bossier City, Louisiana for a total of $376 million. New York-based VICI, the real estate investment trust created from the Caesars Entertainment bankruptcy reorganization, said it will buy Margaritaville’s land and real estate assets of the for $261 million. Penn National will acquire the operations of the casino for $115 million. Penn National and VICI will enter into a lease agreement with Penn National paying property taxes, insurance and maintenance costs in addition to rent, which will be $23 million a year for 15 years with four 5-year renewal options.
It’s the first transaction for VICI that does not involve a property owned by Caesars Entertainment. VICI currently owns the land and real estate of 20 properties, including the Louisiana Downs racetrack casino in Bossier City. It’s also the first operation for Penn that isn’t connected to GLPI, which was spun off from Penn several years ago.
Opened in 2013, Margaritaville has a 26,500 square foot casino with 1,215 slots and 50 table games, a 395-room hotel, six restaurants and food and beverage outlets and a 1,000-seat theatre.
Penn National currently does not have a casino property in Louisiana, but will acquire four Louisiana casinos in New Orleans, Bossier City, Lake Charles and Baton Rouge through its pending $2.8 billion acquisition of Pinnacle Entertainment.
The acquisition must go through regulatory approval and financial analysis, a vetting process conducted by the Louisiana Gaming Board of Control, Louisiana State Police and Attorney General’s Office that will take months.
Penn National, based in Wyomissing, Pennsylvania, spun off the gaming industry’s first REIT, Gaming and Leisure Properties, owners of the real estate associated with nearly 30 of Penn’s hotel-casinos and racetracks.
Penn National Chief Executive Officer Tim Wilmott said, “We are pleased to partner with VICI Properties Inc. to structure this tuck-in acquisition of Bossier City’s newest casino resort. The deal is consistent with our criteria for transactions that are accretive to free cash flow, strategically diversify our revenue and operating base and present well-defined paths to the realization of significant synergies.”
VICI Chief Executive Officer Ed Pitoniak stated, “We are very excited to announce the addition of Margaritaville Resort Casino to our growing portfolio of market-leading gaming, hospitality and entertainment destinations at an attractive cap rate. In addition, VICI is proud to partner with Penn National to strengthen our existing footprint in the Shreveport-Bossier region, and this partnership represents the first step in our strategy to diversify our roster of best-in-class gaming operators” outside of Caesars Entertainment. Pitoniak added, “As the newest casino to the Bossier-Shreveport market, the property has shown exceptional performance and is now one of the market leaders in the region.”
Margaritaville Senior Vice President and General Manager Barry Regula said, “This is a tremendously positive outcome for our crew members, our guests and our community. Penn National Gaming offers outstanding opportunities for employees, a geographically diverse network of destination casinos for our guests and a solid platform for potential future development to enhance the economic benefits to the community.”
Bossier Casino Venture Chief Executive Officer Paul R. Alanis added, “I am pleased to have entered into this agreement with Penn National Gaming and VICI Properties. I am confident that Penn National Gaming will continue the quality operations that have characterized Margaritaville Resort Casino these past five years and will provide new opportunities for our crew members as well as an exciting gaming and entertainment experience for our valued customers.”
The acquisition is not the first time a bid has been made for Margaritaville. In 2016 the Poarch Band of Creek Indians in Alabama attempted to acquire the resort, but declined to complete the sale less than a year later when they weren’t able to operate the casino under their Wind Creek brand rather than Margaritaville.
Margaritaville attracts more people than any other casino in the Shreveport-Bossier market but comes in second behind VICI’s Horseshoe in terms of revenue, with Horseshoe at $14,943,625 and Margaritaville at $13,545,775 according to May figures. Margaritaville’s admissions were 177,252 compared to 117,912 for Horseshoe, which was third after Eldorado Resort with 152,592.
Recent upgrades and amenities at Margaritaville include the Riverview Restaurant and Brew House, Bamboo Asian Café, Busted Coconut pool bar and lounge, high limit slots and table games areas and a dedicated baccarat room. It has received more than 100 awards from various publications, including Southern Gaming Magazine and Casino Player Magazine.
