UPPER MERION >> Since it opened nearly six years ago, Valley Forge Casino Resort has gone through a lot of changes, but none as big as the change that happened about a month ago.
Late in December, Boyd Gaming Corporation announced that it had entered into an agreement to acquire the ever-evolving First Avenue fun palace from Valley Forge Convention Center Partners LP for a cash consideration of $280.5 million.
On the phone from company headquarters in Las Vegas, where Boyd operates a dozen casinos, spokesman David Strow said it was too early in the game to say what, if any, new developments may be in store for the King of Prussia icon.
“We’re still a month out from actually closing on the acquisition. We would need to take a look at the operations and see what makes sense,” Strow said. “But we think there’s a lot of long-term potential in the property. I’ve heard fabulous things about the King of Prussia area, and with the presence of Valley Forge National Historical Park, there are a lot of things drawing people to that area. Pennsylvania has emerged over the last several years to become one of the largest gaming markets in the United States,” he added. “It’s one of the areas where we didn’t have a presence before, so we’re very excited about the opportunity to get into the Pennsylvania market.”
In a press release Keith Smith, President and CEO of Boyd Gaming, noted: “The acquisition of Valley Forge Casino Resort is another excellent opportunity to further grow and diversify our nationwide portfolio. With this acquisition, we will expand into the second-largest gaming state in the country, establishing a presence in a densely populated, high-traffic area just west of Philadelphia. And thanks to Pennsylvania’s recent passage of gaming expansion legislation, there are new opportunities to drive incremental growth at Valley Forge through the expansion of the property’s slot capacity and the introduction of new forms of gaming.”
According to the American Gaming Association, Pennsylvania casinos rake in more gross revenues than any other state in the country except Nevada.
In keeping with the new legislation, the $10 admission casino fee that had been enforced since the casino opened in March, 2012, had been eliminated, which made the situation that much more appealing to Boyd, Strow allowed.
“Obviously, that makes the opportunity to operate in Pennsylvania more attractive, but even before this legislation passed, Pennsylvania was an attractive market for us. It was a state where we did not currently have operations and it’s the second largest gaming state in the country. It trails only Nevada. In terms of commercial casinos, Pennsylvania is now ahead of New Jersey.”
Valley Forge Casino Resort wasted no time touting the new free admission policy on its website, vfcasino.com: “As of October 31, 2017, access to the casino is open to the public at no cost. You can now skip the line and play without paying the access fees! Valley Forge Casino Resort is the region’s only full-amenity gaming resort with live table games and all the latest and greatest slot machines. Our luxurious and exciting casino floor features 600 of the hottest and most popular slot machines, along with 50 of the best table games, including Blackjack, Craps, Roulette, Pai Gow Poker and Baccarat.”
The new law also allowed the casino to add 250 slot machines to its existing 600 machines, Strow noted.
“The increased slot capacity was another important aspect, so yes, they will be expanding their slot inventory very shortly, before we actually acquire the property,” Strow said, adding that the deal was expected to be finalized in the third quarter of 2018.
As noted in the press release, as a result of the company’s substantial free cash flow, Boyd Gaming, under the financial guidance of Moelis & Company LLC, is expected to continue returning capital to shareholders through quarterly dividend payments and share repurchases.
The law firm Cozen O’Connor served as legal advisor to Valley Forge Convention Center Partners LP.
In addition to the casino, which also boasts 50 table games, Boyd inherited a resort featuring eight restaurants, including Revolution Chop House and Valley Tavern, 500 hotel rooms and plenty of meeting, convention and exhibit space.
While acquiring Valley Forge is a momentous move for Boyd, it’s not the company’s only big purchase recently.
“We announced two acquisitions in the span of three days,” Strow said. “Two days before the Valley Forge announcement we announced that we’d acquired four properties in the Midwest from Pinnacle Entertainment — Kansas City, St. Louis and a couple in Cinncinatti. So these are pretty significant geographic expansions for us.”
Together, Valley Forge and the Pinnacle properties will raise Boyd’s dominance to 29 sites across 10 states, Smith said, adding, “We believe this expansion will help drive additional growth throughout our nationwide portfolio,as we market our destination properties to these new customers in the Midwest and Northeast.”
No doubt many gaming aficionados will be happy to find out that their reward points earned at Valley Forge will be redeemable at other Boyd casinos, including Suncoast Hotel & Casino and California Hotel & Casino in Las Vegas.
Strow pointed out that, as the former co-owner of the Borgata in Atlantic City, the company is not a stranger to the East Coast.
“The Borgata is the brand most people associate with Boyd Gaming. We developed and opened the Borgata in a 50-50 partnership with MGM and ran it for almost 14 years,” he said. “We sold our interest in that in 2016. We are familiar with the Northeast, and had many customers from Southeast Pennsylvania that we hosted at the Borgata for many years. So it’s not a new area to us.”
Strow indicated that Boyd is looking forward to becoming part of the King of Prussia culture.
“They have a great team in place at Valley Forge and we’re looking forward to bringing our resources behind what they’re doing. It’s a single property and now Valley Forge is going to be part of a nationwide company with 28 other casino properties across the country. We pride ourselves on customer service,” he added. “There’s a lot of competition in the gaming industry and we understand that if you’re going to have an edge over the competition you have to deliver great service and make your guests feel welcome and special, and that’s something they do at Valley Forge very well. We’re looking forward to introducing ourselves to the area and giving back to the community.”