JACK Entertainment Closes $745M Deal on Cincinnati Casino to Hard Rock International, VICI Properties
Posted on: September 22, 2019, 12:20h.
Last updated on: September 22, 2019, 06:14h.
JACK Entertainment announced on Friday that it closed on the sale of its JACK Casino Cincinnati to Hard Rock International and VICI Properties.
The announcement came two days after the Ohio Casino Control Commission approved a new casino operator license for Hard Rock at its monthly meeting.
Under terms of the $745 million deal, VICI Properties acquired the JACK subsidiary that owned the downtown Cincinnati venue. VICI, a real estate investment trust spin-off from Caesars Entertainment, then entered into a lease arrangement with Hard Rock, which will operate the casino and own the gaming assets.
“We are pleased to officially welcome Hard Rock International and its world-renowned brand to the Queen City,” JACK Entertainment CEO Mark Dunkeson said in a release. “After 10 years and hundreds of millions of dollars of investment developing JACK Cincinnati Casino from the ground up, we are confident that the property’s success will continue into the future as Hard Rock International takes it to the next level of growth.”
The casino, which features 1,800 machines and 100 table games across 100,000 square feet, will be rebranded Hard Rock Cincinnati next spring, according to a Hard Rock release.
Turfway Sale Still Pending
Both sides announced the deal for the Cincinnati casino back in April. At that time, the parties announced the transaction also included Turfway Park, a Kentucky racetrack located 20 minutes south of downtown Cincinnati.
JACK’s announcement said closing on the Turfway sale will take place “in the coming months,” as it still requires the approval of the Kentucky Horse Racing Commission (KHRC). The estimated sale price is $35 million.
However, as the sale remains pending, Turfway faces a new challenge in the market from Churchill Downs Inc. The Louisville, Ky., company revealed plans to invest up to $200 million in a northern Kentucky facility that would offer both thoroughbred racing and historical horse racing machines (HHR). The planned Churchill Downs track has applied to run in 2020 for the same dates Turfway has traditionally held.
Hard Rock and JACK have said they will work together to oppose Churchill’s move, with Hard Rock investing up to $100 million to make upgrades and add HHR machines.
The KHRC, which had been critical of JACK Entertainment’s management of Turfway, will decide on the 2020 racing calendar and, potentially, approve the Turfway sale.
JACK Cutting Back
JACK Entertainment, which is owned by Dan Gilbert, is in the midst of downsizing. Earlier this year, the company closed on the $1 billion sale of the Greektown Casino-Hotel in Detroit to Penn National Gaming.
The closure of the Cincinnati casino sale and the pending approval on the Turfway sale will leave JACK with just two properties, JACK Cleveland and JACK Thistledown. The latter is a racino in the Cleveland area.
As a result of sales, the company announced it will lay off 92 employees. In addition, JACK has realigned its executive structure.
Earlier this month, Dunkeson took over as CEO for Matt Cullen, who moved over to serve in a similar capacity at Bedrock, Gilbert’s development company. Cullen will stay on as the chairman of JACK’s board.
Dunkeson also has responsibilities at Bedrock, and four other JACK executives will be making a move to the development company later this year.