Billionaire Dan Gilbert Sells Greektown Casino to Caesars REIT and Penn National for $1B

Posted on: November 14, 2018, 07:37h. 

Last updated on: November 14, 2018, 07:37h.

Dan Gilbert, the billionaire founder of Quicken Loans and owner of the NBA’s Cleveland Cavaliers, is selling his Greektown Casino-Hotel in Detroit to Caesars’ real estate investment trust (REIT) and Penn National Gaming for $1 billion.

Dan Gilbert Greektown Casino Detroit
Dan Gilbert is walking away from the Greektown Casino in Detroit. (Image: Jeff Kowalsky/Bloomberg/

Caesars’ REIT, VICI Properties, is paying $700 million for the land and real estate assets, and Penn National is in for $300 million for the operational rights. Gilbert’s JACK Entertainment, formerly known as Rock Gaming, acquired the 100,000-square-foot casino and 400-room hotel in 2013 for $600 million.

Gilbert, a Detroit native worth more than $6 billion, told the Detroit Free Press that the sale provides cash for his other business ventures.

“It frees up significant capital to invest in our large developments that we’ve started and some are about to start soon,” Gilbert said. “We’re going to focus on business development and technology, start-up scene in Detroit … and other exciting businesses that will create jobs and excitement and attract people to the city from all over.”

The Greektown deal isn’t expected to close until sometime next year.

Gilbert Dealing Casinos

Rumors began circulating in September that Gilbert was putting his casinos on the selling block.

JACK Entertainment, a privately held company, has stake in four casinos. Along with Greektown, its portfolio includes JACK properties in Cincinnati and Cleveland, and Caesars’ Horseshoe Baltimore. JACK additionally owns the Thistledown Racino in North Randall, Ohio, and Turfway Park parimutuel venue in Florence, Kentucky.

Bloomberg reported recently that Gilbert wants to unload them all, and he has an interested potential buyer in Caesars Entertainment. JACK and Caesars have long been partners, as the present JACK casinos were formerly known as Horseshoes until Gilbert bought out the Las Vegas-based casino operator’s stake during its bankruptcy.

Penn National Continues Expanding

For Penn National, the Greektown deal gives the largest regional gaming operator in the US a presence in yet another state as it continues its rapid expansion. When its $2.8 billion purchase of Pinnacle Entertainment completes this quarter, and Greektown becomes part of its portfolio in 2019, Penn will own and/or operate 41 casinos in 19 jurisdictions.

Penn CEO Timothy Wilmott said in July that the company remains on the offensive looking to acquire new casino properties.

There are a lot of assets out there that are being explored. Difficult to predict what’s eventually going to happen, but I can tell our investors that we’re not going to extend ourselves just to continue to do acquisitions,” Wilmott declared. “It’ll continue to be a very disciplined approach.”

Greektown is one of three casinos in Detroit along with MotorCity Casino and MGM Grand. The city’s gaming market is performing well in 2018, though Greektown commands the smallest market share.

Through October, the three casinos have reported gross gambling revenue of $1.2 billion. That’s a more than two percent gain on 2017.

Michigan is one of 15 states considering legislation to legalize sports betting. Five, Delaware, New Jersey, West Virginia, Mississippi, and New Mexico, have already authorized the recently liberalized gambling activity and joined Nevada in allowing full-fledged sports betting.

The issue is expected to be discussed again in the Michigan Legislature during its 2019 session.