Buy, sell, lease, buy, sell, lease …; Election: What’s at stake

In an elaborate transaction, Caesars Entertainment sold Tropicana Evansville to Gaming & Leisure Properties Inc. for $340 million, after which the lease on the casino will revert to Twin River Holdings, which will pay $28 million a year for the privilege in addition to the $120 million it paid Caesars for the operating agreement. Caesars gets the cash, Twin River the casino. This presumably will begin to assuage the concerns of Indiana regulators over the fact that CZR controls 60% of the gaming revenue in the state and must divest assets accordingly. CEO Tom Reeg whined recently that this was unfair and there was nothing wrong with an oligopoly—understandable, as his company gets to pocket all that money. Anyway, Caesars got an excellent price for its asset, boding well for future Hoosier State sales, especially if it puts its lucrative racinos on the market.

Not done with buying and selling, Twin River unloaded Dover Downs to GLPI for $144 million. Considering that Twin River paid $120 million for a dog like Jumer’s Casino Rock Island, we think it could have held out for a better price for Dover Downs. At least Twin River got a break on the rent, only $12 million/year. Caesars also quietly transferred leases of Isle of Capri Bettendorf and Isle of Capri Waterloo to GLPI for $6 million in cash and a negligible increase in rent. So there’s been a lot of shuffling of the CZR deck. GLPI’s two owned-and operated casinos beat expectations, generating $34 million in revenue and $11 million of cash flow. The REIT reported that its collecting 99% of its rents, despite the economy, and that its casinos are seeing a “strong rebound,” as well as cash-flow generation higher than pre-pandemic levels, presumably due to cuts in operating costs.