Jake’s 58 Casino Officially Sold to Suffolk OTB for $120M
Posted on: May 28, 2021, 10:16h.
Last updated on: May 28, 2021, 11:19h.
Jake’s 58 Casino on Long Island officially has a new owner following a $120 million transaction.
Delaware North confirmed the news that it has divested the Islandia, NY, casino hotel to Suffolk Off-Track Betting Corporation (Suffolk OTB). The sale, first announced in April, was completed this week.
Owning and managing Jake’s 58 will allow Suffolk OTB, both in the short term and the long term, to deliver to our beneficiaries in the state and county,” said Jim LaCarrubba, president and CEO of Suffolk OTB. “We are grateful to Delaware North for partnering with us to make Jake’s 58 such a success and for ensuring a smooth transition.”
Delaware North partnered with Suffolk OTB in 2016 to purchase the former 227-room Marriott Islandia hotel for $40.41 million. Suffolk, which was in dire fiscal straits at the time, had recently been given a lifeline by the state when lawmakers allowed horse racetracks and pari-mutuel betting facilities to operate video gaming terminals (VGTs).
VGTs are similar to slot machines, with one major exception — their spin results are based on a network linking all the terminals. On a traditional slot machine, each device randomly determines if the bet is a winner, and isn’t dependent on other machines’ outcomes.
Suffolk Saves Lease Money
Suffolk OTB has been leasing Jake’s 58’s gaming operations from Delaware North since the casino opened in February of 2017. The property has more than 1,000 VGT machines and electronic table games.
Being privately held companies, Suffolk OTB and Delaware North did not reveal the lease terms. But in a statement this week, Suffolk explained that acquiring ownership of the casino will save the company about $13 million in annual rent.
Suffolk OTB held a 50-year contract to manage Jake’s gaming business. But the company’s initial terms with Delaware North also gave Suffolk a path to buy out Delaware North once possible.
Suffolk confirmed it paid the $120 million purchase price to Delaware North by way of loans.
Since opening a little more than four years ago, Jake’s Casino has generated much revenue for Delaware North and Suffolk OTB.
The casino reported gross gaming revenue (GGR) of $158.26 million in its first full year, $209 million in year two, and $218.7 million in year three. Last year, COVID-19 resulted in Jake’s being closed on state orders from mid-March through August. That resulted in GGR totaling just $104.2 million.
GGR, or net win — the money kept by the casino after paying out prizes to players — is split several ways. The casino retains 45 percent, while another 45 percent goes to the New York State Education Fund. The other 10 percent is allocated to the VGT manufacturer and distributor, and New York Lottery.
Jake’s is one of nine VGT casinos in New York. But it has a large monopoly on much of Long Island, as Resorts World New York City in Jamaica, Queens, is the closest casino.
Related News Articles
November 14, 2023 — 28 Comments—
November 16, 2023 — 19 Comments—
November 10, 2023 — 9 Comments—
November 17, 2023 — 8 Comments—
November 12, 2023 — 6 Comments—