Apparently Penn National didn’t think three’s a crowd because it just closed on a $44 million deal to add two Tunica casinos to its portfolio.
The Pennsylvania-based company already has Hollywood Casino Tunica and will now operate Bally’s Casino Tunica and Resorts Casino Tunica.
It was all part of a transaction that included the company’s real estate investment trust purchasing the land the casinos are on for $82.6 million.
A lease deal was signed between the two firms that will allow Penn National to operate the casinos with a rental agreement of $9 million per year.
“The acquisition will add two complimentary casinos to our existing Hollywood Casino Tunica operations,” Penn National President and CEO Timothy J. Wilmott in a statement. “Thereby presenting Penn National with the opportunity to benefit from a centralized local management structure.”
Capturing More Market Share
Pending approval by the Mississippi Gaming Board, which is expected by June, it will be a strategic coup for the company and allow them to have a dominating presence in the area.
Resorts Casino Tunica is next-door neighbors with their existing property and has 35,000 square feet, featuring 800 slot machines and nine table games, along with a 201-room hotel.
Bally’s Casino Tunica is the real prize in the agreement. It is the closest facility in the city to downtown Memphis, Tennessee, just 34 miles away. It has 40,000 square feet and offers 947 slot machines and 16 table games, along with a steakhouse, buffet restaurant, 24-hour cafe and live entertainment venue.
Gambling on Area Rebounding
The resorts were hit hard by the recession and had filed bankruptcy and were handed over to creditors. Revenues last year for the two properties were a combined $21 million.
Caesar’s has three resorts in the state that were included in their bankruptcy filing two years ago.
There are 16 casinos along the Mississippi River and the Associated Press showed receipts dropped more than 10 percent to $77 million in February compared to $86 million a year ago. Two weeks ago two companies were denied permits to build a place in Biloxi and Diamondhead
But officials at Penn National remain optimistic that they can thrive in the area. Wilmott said he expects to make improvements to the casinos to help build profits.