Gambling in the USA

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

Published

6 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 – April 15-21

Published

18 hours ago

April 22, 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

Caesars Entertainment announced that the Caesars Sportsbook Mississippi app is accepting mobile sports bets at Harrah’s Gulf Coast in Biloxi, Mississippi. Sports fans 21 and older who are interested in wagering on sports via mobile devices can download the Caesars Sportsbook Mississippi app to register and deposit statewide but must be physically present on-property at Harrah’s Gulf Coast to wager.

The Office of Lottery and Gaming (OLG) has announced that FanDuel’s sports betting app and website has officially launched. This development will introduce FanDuel’s sports wagering platform to District residents and visitors, completely replacing the current GambetDC sports betting app and website.

eCOGRA has been officially authorised by the Secretaria De Prêmios e Apostas (SPA) to operate as a certifying entity for betting systems, live gaming studios and online games in Brazil. This announcement marks a significant milestone as eCOGRA continues to extend its international offering of iGaming testing, inspection and certification (TIC) services in regulated markets across the globe.

Jennifer Shatley, a recognised expert in the field and a highly sought speaker and advisor, has joined the Responsible Online Gaming Association (ROGA) as Executive Director. Shatley has had 25+ years worth of experience, working closely with the treatment community, academics, researchers, government bodies, state councils and gaming industry representatives to promote responsible gaming.

Odditt, a leading provider of innovative sports betting data, tools and analytics, has appointed Elaine Milardo as its new Chief Technology Officer (CTO). With over 25 years of experience in the data industry and key roles at DraftKings and Vistaprint, Elaine brings a wealth of expertise to Odditt’s growing team.

Partnerships

Trustly, the global leader in Open Banking Payments, and Light & Wonder, the leading cross-platform global games company, are bringing cashless, in-person deposits to casino floors with Light & Wonder’s cashless solution, RAPIDPLAY. Building on Trustly’s success with guaranteed payments in online sports betting and iGaming, Trustly will deliver the same seamless, quick and secure online payment experience to the physical casino floor.

Fintech company Sightline has entered into an exclusive partnership with compliance and anti-fraud technology solutions leader GeoComply to bolster the security and efficiency of digital transactions within the regulated gaming industry. Sightline will integrate GeoComply’s cutting-edge IDComply identity verification solution as well as GeoComply’s compliance-grade geolocation tools across its comprehensive suite of digital payment solutions for land-based casinos and online gaming operators.

BetMGM has announced a partnership with GameCode, a distinguished iGaming company focused on the North American market. The partnership includes the launch of Boom Boom Boom, HammerCash, Gold Gold Gold and Super3 series which are now live at BetMGM in Michigan and New Jersey through direct integration. BetMGM plans to offer GameCode’s full portfolio of games in all jurisdictions where the operator’s iGaming platform is live pending regulatory approvals.

SCCG Management has announced a joint venture investment with Numb3rs, an innovative all-in-one payment solution provider built for gaming operators. The partnership aims to transform the gaming sector by integrating Numb3rs’ proprietary tech stack, ECRYPT, into the marketplace, thereby offering a comprehensive suite of payment processing solutions.

Gambling in the USA

Gaming Americas Weekly Roundup – April 8-14

Published

1 week ago

April 15, 2024

Niji Narayan

Reading Time: 2 minutes

Latest News

FanDuel Group, the premier online gaming company in North America and an Official Partner of Churchill Downs Inc., announced five time Entertainer of the Year Luke Bryan and Grammy award-winning R&B singer Ne-Yo as the headlining performers at FanDuel’s inaugural Kentucky Derby Party. The exclusive, invite-only event will take place on Friday, May 3 at Paristown Arts and Entertainment District in Louisville, Kentucky from 7:00 PM to 12:00 AM.

TPI, a leading provider of innovative player communication solutions for the casino industry, has appointed Joe Tingson as its new Vice President of Customer Success. With his unparalleled dedication to his customers, Joe will play a pivotal role as a leader for our digital Customer Success and Product teams.

PrizePicks, the largest daily fantasy sports operator in North America, has announced plans for its new 33,000 square foot Atlanta Headquarters, which will be located in the Star Metals Building in Midtown Atlanta. The company plans to grow its workforce by 1000 new jobs over the next seven years, the economic impact of which will be $25M to the state of Georgia.

Century Casinos Inc. has announced that it opened its hotel in Cape Girardeau, Missouri, The Riverview. The Riverview is a 69 room, six-story building with 68,000 square feet that is adjacent to and connected with Century Casino Cape Girardeau. The project cost $30.5 million and was financed with cash on hand.

Churchill Downs Incorporated (CDI) has announced the opening of Terre Haute Casino Resort in Terre Haute, Indiana. The $290 million investment includes a casino floor with 1000 slot machines, 36 table games, and a state-of-the-art sportsbook. The 400,000-square-foot entertainment venue also features regionally inspired bars and restaurants including: Four Cornered Steakhouse, Rockwood Bar & Grill, The Soda Shoppe, Crossroads Center Bar and High Limit Bar.

Bragg Gaming Group Inc., a global B2B gaming technology and content provider, announced that Chief Financial Officer (CFO), Ronen Kannor, has notified Bragg’s board of directors (Board) that he will resign from his position to pursue other career opportunities, effective June 3, 2024. The Company confirms that the search for a replacement CFO has commenced.

Partnerships

EQL Games has partnered with global aggregation leader and NeoGames company, Pariplay, to provide the Virginia Lottery, through an agreement with NeoPollard Interactive, with a series of eInstant iLottery games for their industry-leading digital platform.

JACK Entertainment LLC announced the selection of Konami Gaming Inc.’s SYNKROS to power industry-leading systems technology across its 1.5 million square feet of casino entertainment space. The Ohio-based gaming operator’s portfolio includes a combined 2600+ gaming machines and 85 table games at JACK Cleveland Casino in downtown Cleveland, and at JACK Thistledown Racino, located approximately 10 miles to the southeast.

PrizePicks, the largest daily fantasy sports operator in North America, announced that the company has reunited with the Atlanta Braves as the club’s Official Daily Fantasy Sports Partner for the 2024 season. The partnership extends a longstanding relationship that dates back to 2020, with the two Atlanta-based companies continuing to work together on unique opportunities for their dedicated fans.

Gambling in the USA

Gaming Americas Weekly Roundup – April 1-7

Published

2 weeks ago

April 8, 2024

Niji Narayan

Reading Time: 2 minutes

Latest News

International Game Technology PLC (IGT) announced that it will showcase its performance-focused portfolio of games and solutions for tribal casinos at the Indian Gaming Tradeshow & Convention (IGA) 2024, April 9-11 in Anaheim, Calif. Under the theme “We’ve Got Game,” IGT’s booth #536 will feature a compelling array of gaming solutions designed to engage players and drive growth.

Caesars Sportsbook announced its receipt of the prestigious RG Check accreditation from the Responsible Gambling Council (RGC). The certification includes an assessment of Caesars Sportsbook’s commitment to Responsible Gaming, including areas such as player and Team Member education, public awareness advertisements and funding for organisations dedicated to Responsible Gaming research, awareness and education.

Veriff, a global identity verification (IDV) provider, announced the appointment of Jeffrey Guy as President and COO. Jeffrey brings a wealth of leadership experience at technology companies in driving profitable growth and expanding product portfolio. Before Veriff, he was Chief Operating Officer at DigitalOcean, a publicly traded cloud computing platform provider.

GAN Limited announced that Mr. Brian Chang has recently been named the Company’s Chief Financial Officer. Mr. Chang had previously been serving in an interim capacity. Mr. Chang will be focused on guiding the Company towards a timely closing with Sega Sammy Creation Inc. (Sega Sammy).

Partnerships

The Commerce Casino & Hotel, home to the largest poker room in the world, has announced an exciting partnership with the richest, most prestigious and longest-running poker series – the World Series of Poker (WSOP). This collaboration signifies a pivotal moment for the poker community, bringing together two powerhouses to elevate the poker experience for players and fans worldwide.

BetRivers, powered by Rush Street Interactive, a leading US-based online betting and gaming company, has announced its partnership as the title sponsor for the upcoming NASCAR Xfinity Series Dash 4 Cash race at Dover Motor Speedway. The BetRivers 200, set for Saturday, April 27, is being undertaken with the Delaware Lottery and marks the beginning of a thrilling new chapter in NASCAR history, as RSI commits to the long-term support of this top tier sporting event.

Elys BMG Group Inc., an interactive gaming and sports betting technology company, announced the completion of its sportsbook installation at The Ugly Mug restaurant and bar situated at 723 8th St SE, in Washington, DC. This collaboration underscores Elys’ commitment to providing unparalleled sports wagering experiences for small and local businesses across America.

SCCG Management has announced a strategic partnership with mkodo, a leading technology provider in the iGaming space. This collaboration is set to distribute mkodo’s innovative geolocation product, GeoLocs and other leading solutions across the US and key global markets, including Brazil, leveraging SCCG’s robust market presence and industry expertise.

Prove Identity Inc. announced a strategic partnership with BetMGM, a sports betting and iGaming leader, to enhance the security and user experience for BetMGM customers through the cutting-edge Prove Pre-Fill identity solution. Prove Pre-Fill accelerates digital consumer onboarding by up to 79% and is used by more than 1000 businesses globally across diversified industries, including 9 of the top 10 banks.