Penn National Gaming has announced it has agreed to sell the Tropicana Las Vegas Casino located on the south end of the Las Vegas strip to Gaming and Leisure Properties (GLPI) for $337.5m.
However despite its price tag, the deal will not be paid in cash but rather in a ‘non-cash rent payment’ that will see Penn National continue to operate the Tropicana.
As a result, unless GLPI makes significant changes, visitors to the property are unlikely to see much change, with the buying organization merely taking over the costs of ownership and leasing the property back to Penn National – with the non-cash payment going towards the lease.
In addition to this, GLPI has also agreed to a lease for Penn National’s planned casino in Morgantown, Pennsylvania, with Penn also being given the option by GLPI to acquire the operations of Hollywood Casino in Perryville, Maryland.
Discussing the deal, Jay Snowden, President and Chief Executive Officer of Penn National, stated: “We greatly appreciate the cooperation, creativity and partnership shown by GLPI during this challenging time. We are committed to taking further steps to reduce our ongoing operating expenses in order to ensure we have a healthy business to return to when we are able to re-open our doors.”
With all of its casinos currently closed in response to the COVID-19 outbreak, the move is believed to have been made by Penn National in order to aid its liquidity, as the organization confirmed 1 April saw it furlough 26,000 employees without pay.
In a letter sent to team members addressing the furloughs, Snowden concluded: “This decision was extremely difficult to make for all of us at Penn. Penn National is a family, and we deeply regret the hardship this will place on you and your loved ones.
“We are extremely motivated and focused on re-opening our properties as soon as it is safe and legal to do so. To try to help ease some of the burden, we’re maintaining your medical benefits through June 30, for those team members who are currently enrolled in our health plans.”
