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US – Gaming and Leisure on course for record results with Q3 up 11 per cent

By - 2 November 2022

Gaming and Leisure Properties generated $333.8m in revenue in its third quarter, marking an increase of 11 per cent year-on-year with profits up 52 per cent to $226.2m.

Peter Carlino, Chairman and Chief Executive Officer of GLPI, commented: “The third quarter represented another period of disciplined expansion and diversification of our portfolio of top-performing regional gaming assets, which drove another quarter of record operating results along with strong capital returns and yields for our shareholders.

“GLPI’s record quarterly results and our ongoing momentum highlight the value of our strategic approach to aligning our business with regional gaming’s leading operators while managing the expansion and diversification of our portfolio in an accretive, prudent manner.  Our third quarter growth initiatives include the completion of our previously announced transaction whereby our tenant, Bally’s Corporation, acquired GLPI’s non-land real estate assets and PENN Entertainment’s equity interests in Tropicana Las Vegas Hotel and Casino for approximately $145m, which resulted in a pre-tax gain of $67.4m for GLPI. Upon completing the transaction, Bally’s entered into a 50-year ground lease with GLPI for an initial annual cash rent of $10.5m.

“Since our formation almost nine years ago, GLPI has grown from being a landlord with one tenant and 19 properties to a landlord with six tenants with 57 properties across 17 states as we have significantly diversified our tenant base with the industry’s premiere operators. Our relationship with Bally’s has developed nicely since our first transaction with them in 2021. We look forward to continuing to benefit from our ability to structure innovative growth opportunities with existing and new tenants.  This approach has driven AFFO and dividend growth.

“In this regard, we were delighted to announce a new master lease for seven of PENN Entertainment’s properties earlier this month.  Our ongoing support of our roster of leading regional gaming operator tenants through innovative transaction structures, has proven to be mutually beneficial and we expect the new master lease with PENN Entertainment to extend our record of success on this front. GLPI’s new master lease with our first tenant includes a funding option to allow PENN Entertainment to pursue attractive growth opportunities in several of its existing markets including Illinois, Ohio and Nevada. The relocation of PENN Entertainment’s Aurora and Joliet, Illinois properties will result in some of the state’s freshest properties situated with terrific amenities at new locations with far more traffic given their planned proximity to major thoroughfares and highly consumer-trafficked areas. We also believe the new hotel development at Hollywood Casino Columbus will significantly improve the already impressive performance of that property and ultimately enable PENN Entertainment to transform it into a regional destination. As with other transactions we pursue at GLPI, we believe that this new master lease structure comes with attractive rent and financing terms for both parties under a proven master lease structure that offers GLPI material downside protection while offering us an opportunity to benefit from PENN Entertainment’s long-term growth.

“Looking forward to the balance of 2022, GLPI is on track to generate record results based on the ongoing initiatives we are undertaking to further expand and diversify our portfolio while benefiting from recently completed transactions and rent escalators. Our disciplined capital investment approach, combined with our focus on stable regional gaming markets, supports our confidence that the Company will perform well again in 2023. We remain well positioned to further grow our cash dividend and to drive long-term shareholder value.”

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