Penn National Gaming and VICI Properties said Wednesday the companies completed their joint $376 million acquisition of Margaritaville Resort Casino in Bossier City, Louisiana, a transaction originally announced last June.
Regional casino giant Penn National will pay $115 million for the operations of Margaritaville. Real estate investment trust VICI is paying $261 million for the land and building associated with the casino.
Penn has entered into a 15-year lease agreement for the property with annual payments of $23 million. The transaction was the first deal between Penn and VICI, the REIT formed out of the bankruptcy reorganization of Caesars Entertainment.
VICI President John Payne said transaction for the Northern Louisiana casino was a “meaningful achievement” by marking the company’s first transaction outside of Caesars Entertainment. The company, which came into existence 15 months ago, had 22 resorts under the Caesars, Horseshoe, Harrah’s and Bally’s.
“The transaction is our first step towards fulfilling our objective to diversify our tenant roster,” Payne said.
Margaritaville opened in the Northern Louisiana community in 2013. The property has a 26,500-square-foot casino with 1,215 slots and 50 table games, a 395-room hotel, six restaurants and other non-gaming amenities. The property carries the island resort theme made famous by singer-entertainer Jimmy Buffett. Penn and VICI are buying the resort from Bossier Casino Venture Inc., which is owned by Paul Alanis.
For Penn, Margaritaville marks the company’s 41st casino property. The company operates in 18 different jurisdictions. Following Penn’s $2.8 billion acquisition of Pinnacle Entertainment, the company added four Louisiana resorts to its portfolio – the L’Auberge casinos in Lake Charles and Baton Rouge and the Boomtown casinos in Bossier City and New Orleans.
“Margaritaville is one of the leading casino resorts in Bossier City, and we expect that our proven integration and operating strategies will help grow operating margins as well as free cash flow contributions from the property,” Penn CEO Tim Wilmott said in a statement.
Penn National and VICI have another deal pending. In November, the companies announced a joint $1 billion acquisition of Detroit’s Greektown Casino-Hotel from Jack Entertainment.
Penn will acquire the Greektown operations for $300 million and VICI is buying the land and buildings for $700 million. Penn will sign a 15-year lease with VICI with initial annual rent of $55.6 million.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
