The Louisiana Gaming Control Board is scheduled to consider a deal that would allow Pinnacle Entertainment to sell its real estate assets to the owner and operator of Hollywood Casino Baton Rouge.
The board has placed an item on the agenda for its April meeting, which will be held at 10 a.m. Monday in the LaSalle Building in downtown Baton Rouge, to consider the sale of Pinnacle’s four Louisiana casino properties to Gaming and Leisure Properties Inc. Pinnacle would then lease back L’Auberge Baton Rouge, L’Auberge Casino Resort in Lake Charles, Boomtown Casino Hotel in New Orleans and Boomtown Casino Hotel in Bossier City.
Gaming and Leisure Properties is a real estate investment trust based in Pennsylvania that was spun off from Penn National Gaming in 2013. It owns the casinos that Penn National runs, along with operating Hollywood Baton Rouge and a casino in Perryville, Maryland.
Pinnacle wants to sell 14 of its 15 casino properties to Gaming and Leisure Properties, then lease them back for an initial annual rent of $377 million. The deal was approved by Pinnacle shareholders during a special meeting at L’Auberge Baton Rouge in mid-March. In a news release issued in March after Missouri casino regulators approved the sale and lease-back, Anthony Sanfilippo, Pinnacle’s chief executive officer, said Louisiana was the last state needed to approve the transaction.
Under the proposed deal, Pinnacle shareholders would receive about $36 in assets for each share they own, or about $2.17 billion.
Including debt, Gaming and Leisure Properties said the deal is worth about $4.1 billion.
Unite Here, a labor union that represents 275,000 casino, hotel and food service workers in the U.S. and Canada, has come out against the deal, warning that the sale/lease-back model saddles gambling halls with high rent that will make it difficult for the operators to reinvest in maintenance and other capital expenditures.
Kate O’Neil, of Unite Here, also warned that the deal would give Gaming and Leisure Properties ownership of the land of two of Baton Rouge’s three casinos.