Maryland Regulator Approves Sale of Hollywood Casino Perryville Operations to Penn National Gaming

  • Penn National is buying the casino operations for $31.1m and leasing the property from GLPI
  • Maryland becomes the 20th state in which Penn National has a presence
  • The company will now have direct access to Maryland’s future sports betting market
  • Penn National made a major expansion push prior to the pandemic
Penn National gaming logo on a smartphone with a stock chart in the background
The Maryland Lottery and Gaming Control Commission has given the green light to Penn National’s purchase of Hollywood Casino Perryville’s operations. [Image: Shutterstock.com]

Another leaseback deal

Penn National Gaming has announced that the Maryland Lottery and Gaming Control Commission has approved its acquisition of the operations Hollywood Casino Perryville. The company entered into the deal with Gaming and Leisure Properties, Inc. (GLPI) in December 2020.

we are thrilled to be re-entering the Maryland market at a property we developed in 2010”

“We are thrilled to be re-entering the Maryland market at a property we developed in 2010 as it will add a twentieth gaming jurisdiction to our already leading nationwide footprint,” said Penn National president and CEO Jay Snowden on Thursday.

Penn National is paying GLPI $31.1m cash and will lease the property from GLPI for $7.77m per year.

Gaming and Leisure Properties is a real estate investment trust spun off from Penn National Gaming, the first of the past decade’s trend of REITs originating from casino corporations in the companies’ move to become “real estate light.” GLPI was formed in 2013, MGM Growth Properties sprung from MGM Resorts in 2015, and Caesars spun off VICI Properties in 2017.

Looking toward sports betting

While operating Hollywood Casino Perryville is exciting, Penn National’s primary objective may have been to get into Maryland’s sports betting industry. In fact, Snowden talked about it in Thursday’s press release, saying: “….we’re equally excited to be entering this market following the legalization of sports betting in Maryland a few weeks ago. This acquisition provides another opportunity to expand our unique omni-channel platform with a Barstool-branded retail sports book and mobile app.”

Maryland Governor Larry Hogan signed a sports betting bill into law on May 18, so it wasn’t exactly “a few weeks ago,” but Snowden’s enthusiasm can be forgiven. State residents voted in favor of sports betting on a November ballot referendum and the legislature passed the bill in April.

Penn National just took a shortcut to the state’s sports betting market

The state is poised to have one of the most active sports betting markets in the country, as lawmakers crafted regulations that authorize around 100 combined retail and online sports betting licenses. Ten licenses are earmarked for Maryland’s casinos, so Penn National just took a shortcut to the state’s sports betting market instead of having to partner with a casino.

Putting the “National” in Penn National

Penn National Gaming has been in expansion mode in the last several years. In 2017, the company bought the operations of Bally’s Casino Tunica and Resorts Casino Tunica and then leasied the properties from GLPI, as it tends to do.

2018 was Penn National’s biggest splash, as it purchased Pinnacle Entertainment for $2.8bn. Pinnacle had to sell four properties to Boyd Gaming to satisfy regulators. Penn National netted a dozen casinos out of the deal, leasing them all from GLPI.

The following year, it bought the operations of Margaritaville Resort Casino in Louisiana and Greektown Casino-Hotel in Detroit, while VICI Properties bought the real estate and leased it back to Penn National.

Penn National made another massive move in early 2020, acquiring a 36% stake in Barstool Sports for $163m with the option to up the portion to control or full ownership within three years. Penn National’s sportsbooks are Barstool-branded.

The COVID-19 pandemic hit Penn National hard, forcing it to sell the land on which the Tropicana Las Vegas stands to GLPI for $337.5m in rent credits. GLPI sold the Tropicana’s non-land real estate to Bally’s in April.