Gaming and Leisure Properties Buys Three Casinos for $105M

Gaming and Leisure Properties, Inc. (GLPI) has recently expanded its robust portfolio by acquiring three casinos in South Dakota and Nevada for a noteworthy $105 million. This strategic move includes the Silverado Franklin Hotel & Gaming Complex and the Deadwood Mountain Grand in Deadwood, South Dakota, as well as Baldini’s Casino in Sparks, Nevada. This acquisition not only marks GLPI’s initial venture into the South Dakota market but also strengthens its foothold in the highly competitive Nevada gaming arena. By integrating these properties, GLPI aims to diversify its portfolio further while leveraging the growth potential of these well-established casinos.

The total investment of $110 million allocates $5 million towards vital capital improvements across the newly acquired properties. GLPI, in collaboration with Strategic Gaming Management, LLC (Strategic), has agreed upon two cross-defaulted triple-net lease arrangements. These leases include an initial 25-year term, with options for two sequential 10-year renewals, commencing with an annual rent of $9.2 million. The capitalization rate for this transaction stands at an attractive 8.4%, underscoring the financial soundness of this acquisition. Peter Carlino, Chairman and CEO of GLPI, shared his enthusiasm about this deal, highlighting the

Peter Carlino praised Strategic Gaming Management’s potential, particularly emphasizing the strength and growth trajectory under CEO J. Grant Lincoln’s leadership. He hinted at GLPI’s strategy to maintain a first-refusal right on future acquisitions from Strategic until adjusted EBITDAR from GLPI-owned assets hits $40 million annually. While this speaks volumes about GLPI’s commitment to lucrative partnerships, Lincoln expressed equal enthusiasm stating, “Our approach, honed by decades in fiercely competitive gaming markets, centers on measurable bottom-line results. GLPI stood out in our search for a sale-leaseback partner due to their unique partnership-driven methodology and extensive gaming experience.”

The inherent value of the acquired casinos lies in their diversity and operational excellence. The Silverado Franklin Hotel & Gaming Complex, operating since 1990, boasts 245 slot machines, 16 table games, multiple dining options, and a 68-room hotel, with upcoming renovations partially backed by GLPI’s capital improvement funds. Meanwhile, the Deadwood Mountain Grand, covering 11 acres, features 141 slot machines, eight table games, comprehensive dining options, a 208-space parking facility, a 67-seat sportsbook, and a versatile event center. Baldini’s Casino in Sparks, NV, adds to this mix with