Gaming And Leisure Properties ‘Following The Bread Truck,’ Could Buy Eldorado, Caesars Casinos

Posted on: August 8, 2019, 02:27h. 

Last updated on: August 8, 2019, 03:38h.

Gaming and Leisure Properties, Inc. (NASDAQ:GLPI), the owner of casinos in 17 states, could be a buyer of additional venues if such assets come up for sale amid consolidation in the gaming industry.

The Tropicana in Atlantic City, owned by GLP, a company that could add to its portfolio. (Image:

As part of its $17.3 billion takeover of Caesars Entertainment Corp. (NASDAQ:CZR), Eldorado Resorts, Inc. (NASDAQ:ERI) is mulling property divestments and analysts are wondering if Gaming and Leisure might be a suitor. The Pennsylvania-based real estate investment trust (REIT) says it’s monitoring opportunities as casino operators combine.

I describe it internally as us kind of following the bread truck, keeping an eye on whether a couple of loaves fall of the back, and we would be there to catch them,” said GLP Chairman and CEO Peter Carlino in response to an analyst question on the company’s second-quarter earnings call on Wednesday.

GLP was spun off from Penn National Gaming, Inc. (NASDAQ:PENN) in November 2013, creating the gaming industry’s first REIT. Two more have since spouted up – VICI Properties Inc. (NYSE:VICI) and MGM Growth Properties (NYSE:MGP).

Keeping An Eye On Things

Typically, gaming REITs count the company they were spun off from as its marquee tenant. In the case of VICI, that means Caesars and with MGM Growth Properties, MGM Resorts is the primary driver of rental income.

While Penn National is GLP’s biggest tenant, the real estate company does have a relationship with Eldorodo Resorts, too. Gaming and Leisure owns the Tropicana properties in Indiana and Atlantic City, N.J., both of which are managed by Eldorado.

“So — but we’re paying very, very close attention to that,” Carlino said of the Eldorado/Caesars combination. “Otherwise, there are a number of smaller things that we’re looking at today.”

In addition to Atlantic City and Indiana, GLP owns gaming properties in Louisiana and Nevada. Those are two markets where Eldorado could look to shed assets when it finalizes the Caesars deal in the first half of 2020.

Working With Partners

Without naming specific companies, Gaming and Leisure CFO Steven Snyder said the firm is in talks with casino operators about the possibilities of jumping on an asset that could be sold by Eldorado or Caesars.

“In terms of the M&A activity, we continue to work, as Peter mentioned and continue to be fully engaged with potential operators to look at opportunities that might spring from a Caesars/Eldorado transaction to look at opportunities that might spring from Eldorado’s or Boyd’s or the Penns of the world who look to rationalize their portfolio,” said Snyder on the conference call.

Snyder said GLP’s acquisition plans will be “very episodic” while adding that the company is looking at avenues for growth.

Specific regions for deals were not mentioned on the call, but there has been chatter that Eldorado could sell a Caesars casino on the Las Vegas Strip. Gaming and Leisure owns just one property in that area, the M Resort Spa Casino in Henderson.