Real estate investment trust VICI Properties of New York announced it has closed on the acquisition of Jack Cleveland Casino and the Jack Thistledown racino in Ohio from Detroit-based Jack Entertainment for $843.3 million cash.
In its fifth tenant arrangement, VICI will lease the properties back to Jack Entertainment for total annual rent of $65.9 million through an initial 15-year deal and four 5-year tenant renewal options.
The Cleveland properties are the 28th and 29th gaming operations owned by VICI, a spin-off from Caesars Entertainment in 2017. VICI also has lease agreements for gaming properties operated by Caesars, Penn National Gaming, Hard Rock International and Century Casinos.
VICI President John Payne said Ohio is “one of the healthiest gaming markets across the country.” Ohio’s 11 casino properties collected $1.94 billion in total gambling revenue in 2019, up 4.2 percent or $77.6 million, over 2018’s $1.86 billion. Jack Cleveland came in third, generating $221.1 million of the total revenue. Opened in 2012, the property opened in 2012 and offers 1,300 slots; it’s connected with the Ritz-Carlton and Renaissance hotels, offering a total of 640 rooms. It ranks behind MGM Northfield Park racino with revenue of $253.6 million and Hollywood Casino Columbus with $229.2 million. The Cleveland area’s leading thoroughbred racetrack casino, Jack Thistledown racino opened in 2013 and offers 1,459 slots.
Jack Entertainment officials said the sale is part of the company’s plan to increase profit by selling off properties and focusing solely on running them, not owning them. So far, Jack Entertainment has signed operating agreements with Penn National Gaming, Hard Rock International and Caesars Entertainment.
VICI also is raising more than $2.5 billion in new debt due to its participation in the $17.3 billion Eldorado Resorts and Caesars merger. VICI said it will use $2 billion to complete several transactions included in the deal and the remainder to pay off $498.5 million in debt due in 2023.
As part of the merger, VICI purchased three Caesars properties under the Harrah’s brand in Atlantic City, Laughlin, Nevada and New Orleans for a total of $1.8 billion. VICI will lease the operations back to Eldorado for total annual rent of $154 million.
