The union UNITE HERE has petitioned the Indiana Gaming Commission to reject Pinnacle Entertainment Inc.’s proposed sale of its casinos to Gaming & Leisure Properties Inc. The union said the deal would give Gaming & Leisure Properties more casinos than Indiana gaming law allows, which is a maximum of two licensed casinos per one casino owner.
UNITE HERE said GLPI already owns the Hollywood Casino in Lawrenceburg and Pinnacle owns the Ameristar Casino & Hotel in East Chicago and the Belterra Casino Resort in Florence. Following the acquisition of the two casinos, GLPI would then lease back the properties to an operating company to be spun-off from Pinnacle Entertainment. Pinnacle has applied to the Indiana Gaming Commission for permission to transfer licenses between subsidiaries. The gaming commission did not vote on Pinnacle’s request at its November and will not meet again until March 2016.
Bill Clifford, chief financial officer at Gaming & Leisure, said, “Unite Here is simply trying to manufacture obstacles with complete disregard for the facts or clear interpretation of applicable law.”
Las Vegas-based Pinnacle announced the sale of its 14 casinos to Gaming & Leisure for $4.75 billion, including debt, in July.
In 2013, when GLPI was spun off from Penn National, Indiana and other states licensed it as a supplier. However, UNITE HERE claims the company owns the casinos, does not meet the statutory definition of “supplier” and has veto power over management’s ability to expand on-site properties or develop new ones. “Given its level of control, licensing GLPI as a supplier is not just an absurdity, it also sets a dangerous precedent just as other national gaming companies are considering creating their own REITs and leasing their properties to captive or third-party operators,” the union said. In response, Gaming & Leisure said Penn National and Pinnacle remain as the license holders under their respective agreements.
UNITE HERE represents about 275,000 hospitality workers nationally, with 30 percent employed at casinos. The union also has opposed the Pinnacle-Gaming & Leisure merger with Missouri regulators and with the U.S. Federal Trade Commission. Last month Pinnacle said the deal had been approved by Mississippi regulators and had applied for approval to six other states.
According to the union website, UNITE HERE and Pinnacle’s East Chicago casino have been involved in a length contract dispute.
Following the gaming commission meeting, Indiana Gaming Insight noted, “At a minimum there is a big question of statutory interpretation and perhaps also a major public policy decision at stake here as well that doesn’t make this as simple a transaction as the Hollywood GLPI spin-off.”
