Gaming and Leisure Properties (GLPI) does not appear worried by Caesars Entertainment’s recent decline in lease coverage at certain regional casinos it operates; additionally, Gaming owns several Caesars properties so any possible takeover would likely have no adverse affect on GLPI’s interests.
Though rent coverage at Caesars-operated casinos owned by GLPI had dropped slightly compared to the prior year’s first quarter results (1.77x to 1.69x) due to some one-off factors affecting recent results such as poor gaming hold in Atlantic City and room renovations, management remains confident in the security of its leases.
GLPI owns land under two Caesars casinos located in Iowa and Missouri as well as two Tropicana resorts located Laughlin Nevada and on Atlantic City Boardwalk.
Potential Impact of Caesars Takeover on GLPI
Caesars Entertainment Corporation has recently been identified as an acquisition target and has garnered interest from multiple bidders; however, GLPI has had limited discussions regarding any possible transactions with Caesars.
GLPI’s president expressed that, should Caesars remain under its current management team after any takeover occurs, this transaction should likely remain neutral for them. While any positive developments could potentially arise as part of an acquisition deal, its effect on lease agreements remains unclear at this point in time.
Uncertain is also whether any prospective buyer would require approval by GLPI before proceeding, although REIT must screen buyers first.
Tropicana Las Vegas Update
Land where Tropicana Las Vegas used to reside remains in flux: it currently belongs to GLPI while Bally’s holds operating rights over its casino venue there.
Now that the Major League Baseball stadium project has made rapid strides forward, decisions from Bally’s regarding future development at Tropicana site should become imminent. GLPI has pledged $125 million financing support; whether this amount increases is still unknown.
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