Due to its presence in the Detroit market as operator of Caesars Windsor, it’s not possible for Caesars Entertainment to own a casino in Motown. But nobody said anything about its REIT, Vici Properties. The latter is teaming with Penn National Gaming to purchase Greektown Casino. Owner Dan Gilbert is getting a sweet deal: $300 million for the operational 
share (paid for by Penn) and $700 million for the real estate (Vici’s contribution). Greektown has historically underperformed, so we like its chances with Penn’s leadership and data base in command. Penn will be paying $55.5 million a year to rent the hotel-casino from Vici, which shouldn’t be difficult to cover. JP Morgan analyst Joseph Greff gives the transaction a rave review: “We view Greektown as a strategic acquisition for PENN, providing exposure to a market it is not in right now (Detroit) with relatively stable operating fundamentals and no supply growth risks. The property should benefit from PENN’s scale, which is now 40+ properties post its acquisition of Pinnacle Entertainment.” Penn gains 2,700 slots and 60 table games, in a transaction that Greff expects will throw off $23.5 million in free cash flow per year.
In a separate investor note, Greff rode to Penn’s defense, writing “Amid the widespread fear and loathing in gaming, PENN’s valuation seems to be the most mispriced among 
the lot of downtrodden gaming operator stocks … Following this most recent [40%] pullback, we view the stock’s 2019E valuation as low/silly valuation, while on 2020E, it’s even more so.” Greff adds, “Whether traditional or lease-adjusted, we view PENN’s leverage as reasonable given its regional asset mix (where EBITDA is relatively stable and maintenance capex can be flexed). Using traditional debt, PENN’s 2019E net leverage is just 2.3x, well below the 3.6x average among peers” Caesars, Boyd Gaming and Eldorado Resorts. “Either way, we don’t view PENN’s financial leverage as a concern at this point.”
* Not surprisingly, New York bettors are proving to be a bonanza for New Jersey. In one case, a Staten Island man just drives to Bayonne, places a bet via his cellphone and drives back home again — all in the space of less than half an hour. Examples like that 
ought to get the New York State Legislature off its duff and into legalization of sports wagering. Do it for public safety, guys: Think of all those cyclists bunching up at the midpoint of the George Washington Bridge while they log in and have a flutter. Both FanDuel and DraftKings are getting almost 15% of their action from Pennsylvania and Empire State customers, especially ones who don’t mind paying $5.50 to take the train or paying a $6.50 bridge toll as the price of having access to sports books. Since Pennsylvania sports betting is about to come on line shortly, some of New Jersey’s window of opportunity is closing but the Garden State has logged an impressive $336 million in handle to date.
Not bothering to wait for legalization of sports betting in New York, Empire Resorts, aka Resorts World Catskills, had announced a pact with bet365 Group Ltd. “to offer retail sports betting, an online sportsbook and online gaming at Resorts World Catskills if and when permitted by applicable law.” Give Genting Group kudos for being ahead of the game. bet365 will also prop up struggling Resorts World by purchasing as much as 
$50 million of Empire stock at $20/share. Kien Huat Realty III has also committed to buying up $126 million in Empire stock. Resorts World continues to trickle into the market, with a hotel and additional entertainment venues scheduled for later this year, followed by another hotel, a water park and golf course in 2019. But Empire seems to be pinning a lot of hope on sports betting, which it is juiced in to offer once regulations are written, citing research that New York will be the second-largest market for sports wagers, behind California. Empire likes to cite its relative proximity to Manhattan but is putting most of its eggs in the online-betting basket, which is a smart move.
* Yesterday I got the numbers transposed on the cost of Encore Boston Harbor. It is a $2.6 billion project. I regret the error. Back in September, the Motley Fool sussed out some discussions Wynn Resorts had reportedly been having with prospective buyers. 
The parties tipped as candidates for acquisition were (inevitably) Caesars, which had regulatory problems with the Massachusetts Gaming Commission previously, Penn National, which would have to divest itself of Plainridge Park if it wanted to add a casino megaresort, not to mention Mohegan Sun, runner-up to Wynn when casino licenses were being handed out. However, it’s been all quiet on the eastern front since then. Besides, now that Steve Wynn is suing both the MGC and Wynn Resorts, they are allies of convenience at the moment, and regulators could decide to let the company off easy.
* Congratulations to Miriam Adelson, one of this year’s recipients of the Presidential Medal of Freedom and one of the few who is neither an athlete and/or dead. We presume this gesture is in recognition of Dr. Adelson’s activism on behalf of Israel, although it would also be a sideways thank-you to spouse Sheldon Adelson for stuffing GOP coffers with $130 million this election cycle.
