Penn National Gaming formally severed ties with a San Diego-area Indian casino, saying Tuesday the regional gaming company would receive approximately $15 million in cash for sale of its loan on the gambling facility and after the payment of outstanding license fees.
In a statement, Penn said it would off-set any loss associated with sale of the loan against capital gains related to transactions that are part of the company’s pending acquisition of Pinnacle Entertainment. Penn said the tax benefit to the company would be approximately $20 million.
The statement did not include any comment regarding the Hollywood Casino Jamul, which Penn opened in October 2016 after funding with a $94 million loan for the property’s development and construction.
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.
In a Securities and Exchange Commission filing in March, Penn National said it was ending its management contract with the Jamul Indian Village of California with several years remaining on the agreement. The tribe took full control of the casino on Monday.
The company said new agreements signed with the tribe “terminate substantially” all of Penn’s remaining obligations and liabilities in connection with the project.
The Jamul casino, located about 20 miles outside downtown San Diego, 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.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
