The Rocky Gap Casino Resort in Maryland is getting new owners. Century Casinos ($CNTY) and VICI Properties ($VICI) are coming together to purchase the Maryland casino for $260 million.
During early morning trading hours, shares of $CNTY were trading at $7.48 per share, while $VICI shares were sitting at $33.30.
Pending no setbacks, the deal is expected to close in mid-2023.
Maryland US casino purchase details
Golden Entertainment Inc. will sell the casino after investing roughly $10 million for various improvements. The property sits on 270 acres and attracts over half a million visitors annually, thus making it extremely valuable.
VICI will pay $204 million for the real estate assets, while Century will contribute $56 million for the operating rights.
Earlier this year, VICI became the first REIT (real estate investment trust) to join the S&P 500. The Las Vegas-based company is the largest hotel and convention real estate owner in the US.
In a statement, Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos, said:
“The addition of Rocky Gap is another important milestone in our pursuit to acquire prime US assets. With this acquisition and our pending acquisition of the Nugget Casino Resort in Nevada, we will oversee a US portfolio that reaches from east to west.”
The deal will expand the Century portfolio to 11 venues across the US, representing 94% of its revenue.
“We are looking forward to working with the Maryland Lottery and Gaming Control Agency to obtain gaming approvals and with the casino leadership and team members to effect a smooth transition and great future for Rocky Gap,” they said.
Impact on local Maryland casino customers
The Flinstone, MD, property features over 25,000 square feet of gaming space, 630 slot machines, 16 table games, 198 hotel rooms and five food and beverage venues. The casino resort also includes an 18-hole golf course designed by Jack Nicklaus, a 5,00 square-foot event center, a spa and other outdoor activities.
As of now, it’s unknown what will happen to Golden Entertainment’s True Rewards Players Club. In the interim, it’s safe to assume customer reward points will be in place until at least 2023. After that, there is a possibility The Winners’ Zone — Century’s rewards program will be integrated into the casino.
Wall Street outlook
Additionally, purchasing the casino’s operations will represent an implied 2021 earnings before interest, taxes, depreciation and amortization (EBITDA) multiple of 4.9x, for Century.
In a note to clients, Wall Street analyst David Bain said the purchase of Rocky Gap provides Century with several revenue options.
“Synergies for CNTY include cross-marketing opportunities with its Mountaineer Resort and, potentially, accretive slot mix/reconfigurations. There are also potential expansion opportunities at Rocky Gap, in our view.”
Last year, the property generated $27 million in EBITDA on sales of $78 million.