Twin River, GLPI Buy Tropicana Evansville from Caesars in $480M Deal

Posted on: October 28, 2020, 03:11h. 

Last updated on: October 28, 2020, 11:03h.

Caesars Entertainment Inc. announced Tuesday that it has reached a deal to sell its Tropicana Evansville casino in Indiana to Gaming and Leisure Properties (GLPI) and Twin River Worldwide Holdings. The complex deal is valued at nearly half a billion dollars.

Tropicana Evansville Twin Rivers
Twin River Worldwide Holdings and Gaming and Leisure Properties have agreed to buy Tropicana Evansville from Caesars Entertainment for $480 million. (Image: Google Maps)

Under the terms listed in Twin River’s announcement, the Rhode Island-based gaming company will buy the casino operations from Caesars for $140 million. GLPI, a real estate investment trust, will purchase the real estate from Caesars for $340 million and lease it to Twin River for $28 million a year, with the potential for increases.

The deal, contingent on regulatory approval, is expected to close by the middle of next year.

In a separate deal, GLPI agreed to buy the property of Twin River’s Dover Downs for $144 million. The REIT, in turn, will lease that back to Twin River for $12 million a year. The moves mean Twin River will not need to dip into cash reserves to make its portion of the Tropicana purchase.

Indiana’s first riverboat casino, the Tropicana opened as Casino Aztar in 1995. It moved inland in 2017, and Eldorado Resorts became the owner a year later when it acquired Tropicana Entertainment.

Earlier this year, Eldorado completed a $17.3 billion acquisition of Caesars Entertainment Corp. and rebranded under the iconic gaming brand. As part of the approval in Indiana, the IGC stipulated that Caesars must reach agreements to sell three of its five Hoosier casinos by the end of the year. The new entity currently owns five Indiana casinos. Tropicana Evansville is the first of the sales to be announced.

Indiana Gaming Marketing Expansion

As part of the deal, Twin River also receives the rights to Tropicana’s sports betting and iGaming skins. Last Friday, the Indiana Gaming Commission approved William Hill to start offering online betting by as early as Wednesday. Online casino gaming is not allowed yet in Indiana, although the state legislature is expected to consider that in next year’s session. William Hill is the current sportsbook operator at the Tropicana.

Twin River President and CEO George Papanier said in a statement that Tropicana Evansville is a “great fit” for the company’s portfolio.

It’s also not the first time Twin River has purchased properties from the new Caesars. Some of the sales were required as part of the regulatory approval process, while others were sold to boost the bottom lines of Eldorado and the old Caesars before the deal could close.

Twin River’s purchasing spree from Caesars and the former Eldorado has included Bally’s Atlantic City, Eldorado Shreveport in Louisiana, the Isle of Capri in Kansas City, Mo., and the MontBleu in Lake Tahoe. With all of the Caesars/Eldorado properties factored, including Tropicana Evansville, Twin River will operate 15 casinos.

Dec. 31 Deadline Approaching

When the IGC approved the transaction back in July, Caesars (then Eldorado) CEO Tom Reeg tried to push for an 18-month window to sell the three properties. He noted that getting past the current economic uncertainty would help identify better suitors and benefit the state.

However, the commission chose to set a Dec. 31 deadline for all three casinos because it feared the new Caesars may neglect the properties it chose to market over a longer period of time. Still, commission members said they would be willing to entertain a possible extension.

The four remaining Caesars properties are Horseshoe Hammond, located near Chicago, and Caesars Southern Indiana, located near Louisville, Ky., as well as Harrah’s Hoosier Park in Anderson and the Indiana Grand in Shelbyville.

Caesars officials have said they intend to keep Hoosier Park and Indiana Grand, two racinos within an hour’s drive of Indianapolis. The company plans to invest and expand table gaming at both venues, the only gaming properties in close proximity to the state’s largest city.

It’s uncertain if Caesars has sought to get that Dec. 31 deadline officially extended. A Caesars spokesperson did not respond to an email message on late Tuesday afternoon.

Jenny Reske, deputy IGC director, told Tuesday that Caesars is giving the commission progress reports as the deadline nears, “But we are not in a position to discuss details yet.”