Mon, Sep 23, 5:56pm by Staff Writer
Hard Rock International and VICI Properties completed this past Friday the purchase of JACK Cincinnati Casino in a $745 million deal.
Casino News Daily reports that simultaneously with closing the transaction, the two companies entered into a triple-net lease agreement that will see Hard Rock lease the casino complex for $42.75 million a year for an initial 15-year term with the option for four five-year extensions.
JACK Cincinnati is one of Ohio’s premium gambling venues.
The property features a 100,000 square-foot casino with 1,800 slot machines and 100 table games, 33,000 square feet of meeting space and six dining facilities.
It opened door in 2013 as Horseshoe Cincinnati.
In 2016, the casino rebranded as JACK Cincinnati Casino following the rebrand of its now former owner as JACK Entertainment.
JACK Cincinnati employed around 1,700 people when it opened doors six years ago.
Its workforce currently includes about 1,000 employees.
The property recorded average monthly gaming revenue of about $17 million in 2018.
News about JACK Entertainment’s decision to sell JACK Cincinnati first emerged this part April.
Under the terms of the deal, VICI, the real estate investment trust that spun off from Caesars Entertainment Corp in the fall on 2017, agreed to pay $558 million in cash for a 100 per cent interest in a subsidiary of JACK Cincinnati Casino LLC that owns the land and real estate assets of the Cincinnati casino.
Florida-based gaming and hospitality company Hard Rock International paid another $187 million for the operating assets of the gambling venue.
As mentioned earlier, VICI and Hard Rock entered into a multi-year leasing agreement upon the completion of the purchase.
The deal’s closure means that the casino can now be rebranded as Hard Rock Casino Cincinnati.
The new owners of the property previously said that they will add new facilities to the existing ones, but it is yet to be seen what the expansion might include.
Hard Rock has also agreed to purchase the Turfway Park racetrack in Florence, Kentucky from JACK Entertainment.
That transaction is expected to close in the coming months, pending regulatory approval.
— Michael Dominic Caruso (@mdcvegas) September 22, 2019
In the casino business, it’s the minnow swallowing the whale.
Japan Times reported in June that Eldorado Resorts Inc’s $8.58 billion acquisition of Caesars Entertainment Corp means an underdog from Reno, Nevada – a town long in the shadow of Las Vegas – will become the largest owner of casinos in the US.
In the deal announced Monday, Caesars shareholders will receive about $12.75 a share, including $8.40 in cash.
That’s a 28 per cent premium to the casino chain’s close on Friday.
While the combined company will retain the Caesars name, there’s no mistaking who’s buying whom in this transaction: Eldorado, with a market value of less than $4 billion, is clinching the giant from Las Vegas and its flagship Caesars Palace.
Eldorado’s quick ascent to the top of the industry benefited from a campaign by activist billionaire Carl Icahn, Caesars’ biggest shareholder, who pushed for a sale in recent months.
The Reno company is buying an ailing Caesars, still coping with the fallout of a 2008 leveraged buyout that left it with a mountain of debt.
But it wasn’t the only suitor: Golden Nugget owner Tilman Fertitta proposed merging his restaurant and casino empire with Caesars last year.
Eldorado dates back to a single casino opened in Reno in 1973 by Donald Carano, a lawyer who died in 2017.
The town, which calls itself “The Biggest Little City in the World” has always been the second fiddle of Nevada’s gambling industry.
The business has grown exponentially in recent years under the direction of Tom Reeg, who is now chief executive officer and will lead the combined Eldorado-Caesars along with Chairman Gary Carano and the rest of Eldorado’s management.
Among its purchases, Eldorado acquired MTR Gaming Group and Isle of Capri Casinos, and last year added Tropicana Entertainment, which was controlled by Icahn.
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