What's next after $1 billion sale of Greektown Casino-Hotel?

by Administrator

The $1 billion sale of Dan Gilbert-owned Greektown Casino-Hotel has been finalized.
Vici Properties Inc. on Thursday said it completed the transaction to acquire the land and real estate assets of the Detroit property from Jack Entertainment LLC for approximately $700 million in cash, with Penn National Gaming Inc. acquiring the operating assets for approximately $300 million in cash.
Under the deal first reported in November, New York-based Vici Properties will act as the property owner and Wyomissing, Pa.-based Penn National Gaming will serve as the casino operator.
On Tuesday, the Michigan Gaming Control Board gave the green light to the sale and Vici Properties as a licensed gaming supplier.
The impact of the sale likely won't be felt by patrons or employees for at least a few months, on either side of the transaction. For Penn National's part, "no drastic moves" will be made as the company gets a better handle on the market and needs of the property. There are no immediate plans to change staffing at the casino and hotel, which employ more than 1,500, or make any big investments in the property.
"It's day two, right," said Justin Sebastiano, senior vice president, finance and treasurer, with Penn National. "There's a lot of opportunity, we believe, for us here. Our No. 1 thing really is to get in, talk with all the different departments and learn from everyone there."
Penn National has a $190 million yearly maintenance budget for its 42 properties throughout the country. What that means for Greektown, Sebastiano said, is reinvestment on the casino floor. The company typically replaces one-seventh of its games every year.
Employee impact on Detroit-based Jack Entertainment is also uncertain as Gilbert unloads a large chunk of his gaming portfolio. The company has 120 corporate employees in Detroit and more than 4,000 team members companywide. In addition to Greektown, Gilbert is selling his Cincinnati casino and horseracing track Turfway Park in Kentucky to Hard Rock International and Vici. Gilbert has signaled that he will retain the only two properties left in the portfolio: Jack Cleveland Casino and Jack Thistledown Racino.
"When the need for operational support at Turfway Park and Jack Cincinnati Casino concludes, the team members who do not remain with Jack Entertainment will be provided with significant job searching support and financial security through salary and benefit continuation," Jack Entertainment CEO Matt Cullen said in a statement emailed to Crain's. "Those team members will also be invited to interview for open positions within the Rock Family of Companies."
It has not been announced whether Jack Entertainment will move its headquarters out of Detroit. The company is still working through those details, spokeswoman Samantha Chyette said.
Penn National (NASDAQ: PENN) operates 40 thoroughbred horse racing tracks and casinos, mostly under the Hollywood Casino brand. Vici Properties (NYSE: VICI) is a real estate investment trust spun off from Caesars Entertainment Corp. during its bankruptcy in 2017.
Athens Acquisition LLC, an affiliate of Rock Gaming now called Jack Entertainment, acquired Greektown through a sequence of deals in 2013 for around $600 million and invested millions into remodeling the location.
Opened in 2000, Greektown Casino-Hotel features 100,000 square feet of casino space, approximately 2,700 gaming machines and 60 table games, a poker room, three restaurants, seven fast casual food outlets, four bars and a coffee shop, according to a news release. In addition, the casino includes a 400-room high-rise hotel with 14,000 square feet of event and catering space.