Change of mind
The Missouri Gaming Commission (MGC) voted 4-1 in favor of letting Eldorado Resorts sell the Lumière Place real estate assets to an entity controlled by Gaming and Leisure Properties Inc. (GLPI). As a result of the June 24 decision, GLPI is now the sole landlord of the St. Louis area’s six casinos.
Eldorado originally took ownership of the Lumière Place Casino in 2018 after acquiring Tropicana Entertainment for $1.85bn.
regulators objected because of monopoly concerns
The plan at the time was for Eldorado to sell all of the real estate from the properties it acquired in the Tropicana deal to GLPI for $1.21bn. Eldorado was then going to lease the properties back from GLPI, but regulators objected because of monopoly concerns.
As per the MGC, Eldorado will make an investment of at least $12.5m in the Lumière Place Casino within five years of the GLPI deal officially closing.
Reasons behind the u-turn
The only MGC commissioner to vote against the deal on Wednesday was Dan Finney. He said: “The commission I was with before, all the commissioners were concerned about giving GLPI a monopoly.”
The other four commissioners that voted in favor of the deal were not part of the commission when it rejected the Eldorado/GLPI agreement in 2018.
gaming real estate investment trusts have no involvement in the daily operations of the casinos
The reason why the GLPI real estate monopoly is not deemed to be anti-competitive is because gaming real estate investment trusts have no involvement in the daily operations of the casinos. Five area casinos are under the management of separate operators Boyd Gaming, Penn National, and Eldorado, while the Casino Queen facility is controlled by employees.
Other nearby GLPI properties
GLPI was originally spun off from casino company Penn National Gaming in 2013, with Penn National being GLPI’s biggest tenant. GLPI owns most of Penn National’s real estate assets.
GLPI has been the long-time owner of the Ameristar St Charles and Casino Queen properties. After Penn National Gaming acquired Pinnacle Entertainment in 2018, the River City Casino in Lemay became a part of GLPI’s portfolio.
Penn National has operated the Casino Argosy Alton since 2004 and Hollywood Casino in Maryland Heights since 2012. Both are now owned by GLPI.