Gambling in the USA

Caesars Entertainments REIT to be bought by MGM’s REIT Operator

Published

7 years ago

February 8, 2018

Reading Time: 3 minutes

The Caesars Entertainments REIT to be bought by MGM’s REIT Operator. The deal seems dubious owing to the Caesars Entertainment debt holders wanting a prompt payback for their losses.

The all tangled up bankruptcy case of Caesars Entertainment Operating Corp. (CEOC) could finally take a turn in case the MGM Growth Properties (NYSE: MGP) has their way and gains VICI Properties, the real estate investment trust (REIT) that was created on account of the court proceedings.

MGM Growth Properties has come up with offers to buy VICI for $19.50 a share, however, the REIT, that owns the various properties of Caesars Entertainment (NASDAQ: CZR), has apparently rebuffed the overture, so MGM has publicised the offer in an attempt to force management’s hand ahead of a planned IPO.

A tortured existence

VICI Properties was created in the wake of CEOC’s $18 billion bankruptcy, which saw Caesars Entertainment restructure the operating company into two units, one to manage its gaming operations and the other a REIT to own the land the casinos sit on. VICI is largely controlled by creditors that are still owed billions of dollars. Caesars itself merged with another subsidiary, Caesars Acquisition Co.

If VICI merged with MGM Growth Properties, which is the REIT that owns the casinos of MGM Resorts (NYSE: MGM), it would create one of the largest triple net lease REITs. A triple net lease is an arrangement in which properties are sold to the REIT, but the tenants (in this case, the casino operators) are responsible for paying all real estate taxes, building insurance, and maintenance costs on the properties.

If the two REITs merged, the combined company would own 32 casinos and four racetracks. MGM Growth Properties owns 12 of MGM Resorts’ casinos, including Mandalay Bay, the Mirage, and the Luxor in Las Vegas, as well as the Borgata in Atlantic City. VICI owns Harrah’s and Caesars Palace in Vegas, Caesars in Atlantic City, and various Horseshoe and Harrah’s properties in a number of regional markets.

Investors typically like REITs because of their unique tax advantages that require the entities to distribute at least 90% of their income to their shareholders.

Although it would be an uncommon situation for MGM Growth Properties to own properties belonging to Caesars, it’s not unheard of. Penn National Gaming (NASDAQ: PENN) is acquiring rival regional casino operator Pinnacle Entertainment (NASDAQ: PNK) in a $2.8 billion deal, but they were already closely related because Gaming & Leisure Properties (NASDAQ: GLPI), the REIT Penn created to hold its property, also owned Pinnacle’s assets.

Bird in the hand

Although the MGM REIT offered to use its stock to complete the acquisition of VICI, it said it would consider paying a portion of the purchase price in cash. If consummated, VICI shareholders would own 43% of the merged company, assuming it was an all-stock deal, but as MGM noted in its release about the proffer, “VICI has elected not to engage in meaningful discussions.”

That could be because of the bankruptcy proceedings that created VICI in the first place. Of the $18 billion worth of debt CEOC had, some $10 billion was wiped out by the restructuring. Agreeing to the REIT buyout would mean the creditor owners would have to wait a long time to be made whole. An IPO would be a much faster route to recoup the losses, assuming it’s successful.

However, that is one of the reasons MGM Growth Properties said the merger would be a better option. The letter to VICI’s Chairman and CEO said the proposed transaction “represents a meaningful premium to the potential value your current shareholders would receive in the event of an IPO, especially after considering the fees, discounts, dilution, risks, and uncertainties associated with such an offering.”

Nevertheless, VICI Properties announced the terms for its IPO last month, with it planning to raise $1 billion by offering 50 million shares at a price between $19 and $21 a share. Renaissance Capital says that at the midpoint of the proposed offer range, the REIT would have a fully diluted market value of $7 billion. The stock would trade on the NYSE under the ticker VICI.

Considering VICI Properties has ignored MGM Growth Properties overtures, it looks as if the enduring saga of Caesars Entertainment and its torturous reorganization will live on, perhaps as a publicly traded company. That does not mean investors should jump on the IPO since its owners would be looking for ways to recoup their losses, which may not necessarily align with outside investors.

Gambling in the USA

Gaming Americas Weekly Roundup – October 28-November 3

Published

2 days ago

November 4, 2024

Niji Narayan

Reading Time: 2 minutes

Welcome to our weekly roundup of American gambling news again! Here, we are going through the weekly highlights of the American gambling industry which include the latest news and new partnerships. Read on and get updated.

Latest News

Elray Resources Inc. has announced a significant milestone in the company’s growth strategy. The company has completed the sale of proprietary technology to 180 Life Sciences Corp. (NASDAQ:ATNF), a NASDAQ-listed company in exchange for preferred stock convertible into a 40% stake in ATNF and warrants to purchase 3 million shares of ATNF common stock, the conversion/exercise of which is subject to stockholder approval. The technology stack contained within Elray’s technology package will assist ATNF in launching an iGaming Blockchain casino.

PrizePicks, the largest daily fantasy sports operator in North America, has announced that it has been awarded Daily Fantasy Sports Operator Licenses in Delaware and Missouri. The company will launch Arena, its innovative peer-to-peer fantasy sports contest, in both states. With these new state launches, Arena will now be available in 15 states across the US.

The Pennsylvania Gaming Control Board (Board) unanimously voted to renew the Category 2 stand-alone casino license of Wind Creek Bethlehem LLC, operator of Wind Creek Bethlehem casino in Northampton County. In making the decision, the Board determined that Wind Creek Bethlehem LLC had fulfilled the obligations under its previously approved casino operator’s license and therefore qualified to have its license renewed for an additional five-year period.

Aristocrat announced that the company was the first international slot and online technology company to be granted a Gaming-Related Vendor license by The General Commercial Gaming Regulatory Authority (GCGRA), the federal entity overseeing commercial gaming activities in the United Arab Emirates (UAE). This announcement grants Aristocrat the ability to provide the company’s land-based electronic gaming machines (EGMs) and online games and technology solutions to commercial gaming operators licensed by the GCGRA.

Partnerships

SCCG Management, a leading global advisory and consulting firm in the gambling industry, has entered into a strategic partnership with Slot Machines Unlimited, a premier provider of refurbished slot machines and gaming equipment. The partnership between SCCG Management and Slot Machines Unlimited leverages both companies’ strengths: Slot Machines Unlimited’s expertise in refurbished gaming equipment and SCCG’s deep industry insight, global network and strategic growth capabilities. The collaboration will enhance Slot Machines Unlimited’s international sales and service operations, ensuring gaming establishments worldwide have access to high-quality slot machines and support.

Galaxy Gaming Inc. has announced that the Galaxy Operating System (GOS) is now live on over 50 ships worldwide with Carnival Corporation & PLC, the world’s largest leisure travel company. Since the installation, tables powered by GOS have awarded over $5 million in jackpot payouts to players. GOS is the jackpot progressive system for all Carnival Corporation ships, including Carnival Cruise Line, Holland America Line and Princess Cruises. Launched in 2024, GOS is the next-generation game management system developed by the industry’s leading table game experts.

The hottest new game from Aristocrat Gaming, Phoenix Link, is now live on casino floors, with Yaamava’ Resort & Casino being the first in North America to offer the highly-anticipated game. As the next evolution of the international hit game, Dragon Link, Phoenix Link features player-favourite mechanics from top games with all-new themes, features and bonuses.

Gambling in the USA

Gaming Americas Weekly Roundup – October 21-27

Published

1 week ago

October 28, 2024

Niji Narayan

Reading Time: 2 minutes

Latest News

Bally’s Interactive, the digital and sports betting division of Bally’s Corporation, announced the official launch of the Bally Bet Sportsbook app in Tennessee, marking its expansion into the tenth state. This milestone comes on the heels of recent successful Bally Bet launches in Massachusetts and Maryland. Sports enthusiasts across the Volunteer State can now revel in the comprehensive offerings of the Bally Bet sportsbook app. With a wide array of betting options, including spread, money line and total bets, as well as in-game betting and same game parlays, Tennessee sports fans will have an unparalleled wagering experience.

ESE Entertainment Inc., a gaming company that provides a range of services to leading video game developers and publishers, has announced that it has acquired Bombee Global Entertainment (Bombee Americas), the North American arm of Bombee Event Production AB, (Bombee), a global production company specialised in live production, special effects, broadcast and event management for the gaming sector. Bombee has successfully collaborated with ESE to bring its premier event production services and world class customer service to North America and beyond. The North American arm of Bombee, Bombee Americas, will continue to grow and scale in this new organisational structure under ESE, while maintaining its entire team and global support.

Matthew Wantman has become the overall champion of the PokerGO Tour PLO Series II presented by PLO Mastermind. Wantman secured the prestigious honor after an impressive showing at PokerGO Studio in Las Vegas, outperforming a talented field of the best PLO players in the world to earn the $10,000 PGT Passport bonus. The PGT PLO Series II featured a series of high-stakes pot-limit Omaha tournaments. Wantman’s consistent performance set him apart from the competition and solidified his spot atop the leaderboard.

Partnerships

SYNOT Games has announced its further expansion into the Colombian market through a partnership with BetPlay. This alliance highlights SYNOT Games’ commitment to increasing its presence in Latin America and providing its engaging and innovative games to a wider audience. Through this partnership, BetPlay’s online platform will feature a curated selection of SYNOTGames’ top-performing titles, including fan favourites like Aztec Jaguar, Diamond Fever, Realm of Lions.

Internet Sports International, a global provider of turnkey race and sportsbook software solutions, announced its partnership with the We-Ko-Pa Casino Resort in Fort McDowell, Arizona. Through this consultancy, ISI is powering the casino’s sportsbook and retail sports wagering operations on its gaming floor with its award-winning system. WKP Sportsbook is currently operating, allowing patrons to elevate their excitement by wagering on their preferred sporting events with up-to-the-minute odds and live action. The automated sportsbook kiosks provide access to a wide range of sports propositions for both the beginner and expert bettor.

Aristocrat Gaming, a leading designer, manufacturer and distributor of regulated slot games, announced it is now a promotional partner for Princess Cruises, one of the world’s most iconic cruise lines. Through this exciting collaboration, Aristocrat Gaming will design innovative gaming experiences for guests onboard Princess ships as well as create promotions with land-based casinos that offer Princess cruises as rewards.

Gambling in the USA

Gaming Americas Weekly Roundup – October 14-20

Published

2 weeks ago

October 21, 2024

Niji Narayan

Reading Time: 2 minutes

Latest News

Konami Gaming’s President & Chief Executive Officer Steve Sutherland has received the Association of Gaming Equipment Manufacturers’ (AGEM) 2024 Jens Halle Memorial Award during the official awards ceremony at the Global Gaming Expo (G2E) Las Vegas. He was selected for excellence in commercial gaming professionalism, as the embodiment of business success, attention to detail, evident humanity, willingness to “go the extra mile” and long-lasting dedication to the health of the industry as a whole. Investing more than three decades of his career in the gaming supplier sector, Steve Sutherland is a central figure and longtime advocate in responsible gaming industry advancement.

RotoUnderworld, a technology company that analyzes statistical data for fantasy sports, announced that it has raised $1.5 million in a pre-seed funding round to build the next-generation fantasy gaming platform. The round was led by iGaming mavens and technology investors recognising the company’s hyperactive user base and mobile development capabilities. RotoUnderworld’s new FastDraft app is revolutionising the iGaming sector with high-engagement fantasy contests that appeal to both low and high-volume customers.

Scientific Games announced the appointment of Patrick Homm as Vice President, Systems Engineering for the company’s international lottery systems technology. Patrick Homm brings over a decade of experience in innovative gaming systems, software engineering, technology leadership and large-scale systems architecture to his new role.

FanDuel, North America’s premier online gaming company and an Official Sports Betting Partner of the National Basketball Association (NBA), is tipping off the NBA season by bringing back a promotion to provide fans with a three-month subscription to NBA League Pass. Fans who opt-in can also view an enhanced broadcast experience featuring live odds from FanDuel during NBA League Pass games.

Partnerships

Community Gaming, the leading esports platform for automated tournament payouts and sponsor of the Mobile Legends: Bang Bang’s professional league for the Latin America Region, MPL LATAM, now supports developing esports communities in Latin America in collaboration with Moonton. This partnership is a significant boost to CG’s existing advantages associated with its grant programme, a partner-backed initiative to provide organisers with economic resources based on the performance and growth of their local gaming communities.

WPT Global has partnered with Triton Poker Series as the official sponsor of the renowned Triton Poker Super High Roller Series. This partnership ushers in a new era of growth for the Triton Poker Super High Roller Series, as it continues its journey as a leader in high-stakes tournament poker. WPT Global – now offers players the exclusive opportunity to qualify for Triton Poker Super High Roller Series events, expanding accessibility to one of the poker world’s most prestigious tournament circuits.

SCCG Management, a global leader in Tribal gaming advisory and management services, has announced a strategic partnership with Steelhead Compliance Solutions, a leader in tribal gaming compliance and regulatory affairs. This partnership aims to create significant opportunities for tribal nations by connecting them with SCCG’s expansive network of over 200 affiliated gaming companies and service providers. Together, SCCG and Steelhead will work to strengthen tribal gaming operations, enhance regulatory compliance and uphold tribal sovereignty.