Change is in the air in the Northeast casino market.
New casinos are popping up across the region. The big change isn’t necessarily new though, it’s old.
In New Jersey:
- Revel/TEN Casino was sold to Bruce Deifik. It will reopen in the near future as Ocean Resort Casino.
- The Trump Taj Mahal was sold to Hard Rock International and will reopen as Hard Rock AC on June 28.
- Tropicana was sold to Eldorado Resorts as part of Eldorado’s larger acquisition of Tropicana Entertainment.
Pennsylvania has been a game of musical chairs:
- Lady Luck Nemacolin was purchased by Eldorado Resorts as part of Eldorado’s acquisition of Isle of Capri Casinos.
- Presque Isle Downs and Casino was sold to Churchill Downs.
- Valley Forge Casino Resort was sold to Boyd Gaming.
- Sands Casino Resort Bethlehem was sold to Wind Creek Hospitality.
- The Meadows Casino was sold to Penn National as part of Penn National’s larger acquisition of Pinnacle Entertainment.
With the exception of the Eldorado purchase of Isle of Capri Casinos, the sales in both states have a common thread:
They all occurred after the legalization of online gaming. Additionally, they came after the passage of sports betting legislation, pending a favorable Supreme Court ruling.
It’s safe to say that these new opportunities are some of the driving forces behind the sales.
Seizing the online gaming opportunity
Online gaming is not only providing opportunities for large casino companies looking to expand their online gaming footprint, it’s an opportunity for companies that oppose online expansion or don’t have the resources and assets to compete in a national online market to jump ship as well. And if they do, they get top dollar for their suddenly in-demand properties.
The recent flurry of sales in Pennsylvania really highlights this dynamic.
Big national casino companies are entering the market. Boyd Gaming, Churchill Downs, and Wind Creek Hospitality are all new players. Penn National was already part of the Pennsylvania casino market. Elsewhere, Eldorado maintained its PA presence by selling Presque Isle but keeping Lady Luck.
Exiting the market are the anti-online gambling Las Vegas Sands and Valley Forge Convention Centers Partners. The latter’s only casino asset was the Valley Forge Casino.
With the acquisition of Tropicana, Eldorado Resorts is now a player in the two largest online gaming states.
The forthcoming Hard Rock AC and Ocean Resort Casino both announced online gaming partnerships with GiG and GAN respectively.
Seizing the sports betting opportunity
Similarly, the companies entering the New Jersey and Pennsylvania markets are all well-positioned to capitalize on sports betting opportunities. That is, should the SCOTUS issue a favorable ruling.
Both states have already passed sports betting bills. Therefore, it’s not surprising to see companies with a strong national presence trying to get in on the ground floor of these two markets.
It’s probably not a happy coincidence that the new entries in Pennsylvania and New Jersey already have properties in other states with sports betting legislation. West Virginia and Mississippi already passed laws. Several states where properties reside are seriously considering sports betting as well.
A quick look at company assets shows Eldorado and Penn National operate casinos in both states. Boyd Gaming, Hard Rock, and Churchill Downs all have a presence in Mississippi as well. Moreover, Wind Creek Hospitality is in the process of building a Mississippi casino.
Add it all up and you get…
… a lot of interest in states with legal online gaming and legal sports betting (pending SCOTUS approval).
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