Regional gaming giant Penn National Gaming will end its management contract with the Hollywood Casino Jamul near San Diego at the end of May, the Wyomissing, Pa., based company announced in a Securities and Exchange Commission filing Thursday.
Penn, which provided a $94 million loan for the property’s development and construction, said in the SEC filing it would record an additional $29.4 million impairment charge for the fourth quarter. It had previously announced an impairment charge of $48.5 million on the company’s loan and unfunded commitments to the Jamul Indian Tribe.
A transition for the tribe to take over management began Thursday. The Jamul tribe is expected to take full control of the casino on May 28.
Penn National did not release a statement concerning the change. In the SEC filing, Penn National said it may never realize any value for the loans, which could lead to additional charges of up to $27.9 million. The loans are still outstanding, and Penn said its only material recourse for the collection was from positive cash flow from the casino or a sale of the loans to a third party.
The company also said in the filing it may incur unexpected costs related to the termination and transition of its management contract with the Jamul Tribe.
Hollywood Casino Jamul opened in October 2016 at a cost of $360 million. The casino had been planned by the Jamul tribe since the 1990s. Construction on the four-acre parcel finally began in 2014.
The eight-story facility, with five stories of underground parking and three above, is 200,000 square feet, with more than 1,700 slot machines and 50 live table games. The casino employs 1,000 workers.
There are eight restaurants, a bar with an outdoor seating area offering a view of the mountains in Jamul, and a sports bar dedicated to the late San Diego Padres outfielder Tony Gwynn.
Penn National operates several casino properties around the country under the Hollywood brand and there was no mention what would happen with the property’s name. The company had planned a marketing campaign for the San Diego casino with its two Nevada properties, Tropicana Las Vegas and M Resort in Henderson.
