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US – Gaming and Leisure Properties on course for record breaking year

By - 1 August 2022

Gaming and Leisure Properties, whose portfolio consists of 57 gaming interests, generated record second quarter revenues of revenue of $326.5m up from $317.8m in Q2 2021 with the operator confident it is on course for its best ever year.

Peter Carlino, Chairman and Chief Executive Officer of GLPI, commented: “GLPI’s record second quarter results and our ongoing momentum highlight the value of our strategic, accretive approach to the expansion and diversification of our portfolio of top-performing regional gaming assets managed by leading operators, while carefully managing our capital structure and cost of capital. We continue to benefit from new and innovative growth opportunities with existing and new tenants, while driving increased capital returns to shareholders in the form of growing dividends. Given the predictability of our rental revenue streams, we believe the resiliency of our portfolio will be highlighted in the current economic environment.

“Our second quarter growth initiatives include the completion of the acquisition of the land and real estate assets of Bally’s Corporation’s (‘Bally’s’) three casinos in Black Hawk, CO and Bally’s Quad Cities Casino & Hotel in Rock Island, IL for $150 million. With strong rent coverage and an accretive cap rate, the transaction meets our criteria for portfolio expansion while further diversifying our master lease.

“In late June, we again expanded our Bally’s relationship and agreed to acquire, in an accretive transaction, the real estate of Bally’s two Rhode Island casino properties – Bally’s Twin River Lincoln Casino Resort and Bally’s Tiverton Casino & Hotel – for $1bn. Both properties are expected to be added to the existing Bally’s Master Lease with an additional annual rental stream of $76.3m for GLPI. We believe this transaction is evidence of the strong, supportive, long-term relationships we build with our tenants and we are delighted to further our association with Bally’s. These assets generate excellent operating results as they are the only two gaming facilities in Rhode Island, and the transaction affords GLPI additional geographic diversity as the state would represent our 18th U.S. jurisdiction. Importantly, this transaction features a conservative rent and a master lease structure that offers us material downside protection while presenting GLPI with an opportunity for additional long-term growth. Reflecting our innovation and flexibility when transacting with our tenants, and as disclosed when the transaction was announced, if requisite third-party consents and approvals for our acquisition of Bally’s Twin River Lincoln are not received on a timely basis, GLPI plans to acquire the real property assets of the Hard Rock Hotel & Casino Biloxi in Mississippi and Bally’s Tiverton Casino & Hotel for $635m. Under this alternative structure, we would have the option to acquire the real property assets of Bally’s Twin River Lincoln prior to December 31, 2024 for a purchase price of $771m. In either instance, the transactions are expected to be accretive to GLPI’s AFFO.

“As we look to the second half of 2022, GLPI remains well positioned to deliver record results as we further expand and diversify our portfolio and benefit from recently completed transactions and rent escalators. We are delighted with our growth trajectory and intend to continue to prudently invest in existing and new tenant relationships by sourcing portfolio enhancing, accretive transactions. Our disciplined approach to investing capital, combined with our focus on stable regional gaming markets, supports our confidence that the Company is positioned to perform well and demonstrate the resiliency of our business model in the face of potential recession scenarios. Taken together, we believe these factors will support our ability to increase our cash dividends and drive long-term shareholder value.”

As of June 30, 2022, GLPI’s portfolio consisted of interests in 57 gaming and related facilities, including approximately 35 acres of real estate at Tropicana Las Vegas, the real property associated with 34 gaming and related facilities operated by Penn (excluding the Tropicana Las Vegas), the real property associated with seven gaming and related facilities operated by Caesars Entertainment, the real property associated with four gaming and related facilities operated by Boyd Gaming Corporation, the real property associated with six gaming and related facilities operated by Bally’s, the real property associated with three gaming and related facilities operated by Cordish and the real property associated with 2 gaming and related facilities operated by Casino Queen. These facilities are geographically diversified across 17 states and contain approximately 29m square feet of improvements.

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