Penn Entertainment to relocate casinos and build new hotel projects
The company plans to relocate its riverboat casinos in Aurora and Joliet, Illinois, and to build a new hotel at Hollywood Columbus in Ohio and a second hotel tower at the M Resort in Henderson, Nevada.
US.- Penn Entertainment has announced that it intends to relocate its riverboat casinos in Aurora and Joliet, Illinois, to new land-based facilities. It also plans to build a new hotel at Hollywood Columbus in Ohio and a second hotel tower at the M Resort in Henderson, Nevada.
Jay Snowden, chief executive officer and president of PENN Entertainment said: “We are delighted to announce these exciting new growth projects, which we expect will generate strong free cash flow returns and create long-term value for our shareholders.
“Since the change in law to permit land-side casino relocation in Illinois, we have been exploring the viability of relocating our aging riverboats in Aurora and Joliet. Thanks to the support of our local community leaders, in particular the visionary leadership of Mayor Richard Irvin and his staff in Aurora, we are very excited to be moving forward with these projects.”
Snowden explained that the company’s plan for Aurora is to construct a modern, best-in-class casino and hotel in an ideal location off I-88, adjacent to the Simon Premium Outlet Mall.
The Aurora development will include the transfer of certain parcels of land from the city, and up to $50m of the project will be funded by the city through new bond issuance, subject to final approval by the Aurora City Council. In Joliet, the casino will be located in the Rock Run Crossings development, close to the I-80 and I-55 interchange.
The company also announced the expansion of its Hollywood Casino Columbus in Ohio and the M Resort in Henderson, Nevada, subject to municipal approvals. According to Snowden, at the M Resort, the addition of a second tower will benefit from the strong demand in the Henderson locals market.
In connection with these projects, Penn has entered into an agreement with Gaming and Leisure Properties to create a new master lease that would include the two new facilities in Aurora and Joliet, in addition to Hollywood Columbus, Hollywood Toledo, the M Resort, the Meadows and Hollywood Perryville.
Snowden concluded: “The overall estimated budget for these new growth projects is approximately $850m. With the ability to access attractive financing from GLPI covering up to $575 million of the anticipated costs, along with up to $50m from the City of Aurora, subject to final approvals, we have the opportunity to pursue these high-growth projects while preserving our cash position and leverage profile.”
Penn National Gaming announces rebranding as it releases Q2 results
In August, Penn National Gaming announced that it rebranded as Penn Entertainment. The name change was announced as the company released its second-quarter results. It reported revenue of $1.6bn, up 5 per cent year-on-year. Q2 adjusted earnings were $504.5m, down from the $586.6m in the same period in 2021.
This resulted in net income of $26.1m and net income margin of 1.6 per cent, down significantly from the $198.7m reported in Q2 2021. Revenue includes $55.4m related to the gross-up of gaming tax reimbursements from third-party skin partners.
