Bally’s Lands Chicago On line casino Funding in $2B Take care of GLPI
Shares of Bally’s (NYSE: BALY) surged Friday after the gaming firm introduced it’s going to strike offers with Gaming and Leisure Properties (NASDAQ: GLPI) for an mixture of $2.07 billion in financing. That closes an $800 million shortfall the operator confronted on its Chicago on line casino resort mission.
Bally’s momentary on line casino in Chicago. The operator introduced a collection of agreements with GLPI that present financing for the everlasting on line casino within the Windy Metropolis. (Picture: Chicago Tribune)
An affiliate of Gaming and Leisure — one of many largest house owners of gaming actual property — is buying the property property related to Bally’s Chicago enterprise and can “fund building exhausting prices of as much as $940 million at an 8.5% preliminary money yield.” That funding might be delivered from August 2024 via December 2026.
Along with the event funding of exhausting prices, GLPI additionally intends to accumulate the Chicago land for roughly $250 million earlier than improvement begins. Upon GLPI’s buy of the Chicago land, hire will begin beneath a brand new lease carrying a 15-year preliminary time period with an preliminary money yield of 8%,” in line with a press release issued by the true property funding belief (REIT).
The announcement arrived at a essential time for Bally’s in Chicago. In March, executives from the Rhode Island-based regional on line casino operator instructed the Nevada Gaming Management Board (NGCB) the corporate was going through an $800 million funding hole in Chicago, stoking considerations that the much-ballyhooed debut of a on line casino resort within the metropolis could not come to life.
The lease settlement on the Chicago property has been amended to mirror annual hire of $20 million at a cap charge of 8.5%. Shares of Bally’s are increased by 4.71% at this writing.
Extra Particulars on Bally’s Chicago On line casino
By procuring the wanted financing and, assuming numerous native regulatory approvals are granted over the close to time period, it’s doable that Bally’s may quickly begin demolition of the Freedom Middle, probably positioning the operator to fulfill the anticipated September 2026 debut of the Chicago gaming venue.
Bally’s additionally introduced that the placement of the 500-room resort tower might be moved to the southern finish of the property. The preliminary plan referred to as for the resort to be situated on the northern finish, but it surely was later found that may harm underground infrastructure, sparking criticism that neither Bally’s nor the town had correctly thought out the mission.
The gaming firm additionally implied it intends to maneuver ahead with an preliminary public providing (IPO) tied to the Chicago plan that’s designed to permit native traders, together with enterprise house owners and minority teams, to come clean with 25% of the enterprise.
Different Transferring Elements in Bally’s/GLPI Settlement
Earlier than Friday, Bally’s and GLPI had an current relationship that was poised to develop, and never simply due to the Chicago pact. As a part of the broader settlement, the REIT is buying the true property of Bally’s Kansas Metropolis and Bally’s Shreveport for a complete of $395 million. The mixed annual hire on these properties might be $32.2 million, “representing an 8.2% preliminary money capitalization charge.”
The 2 sides additionally agreed to change the phrases of an settlement beneath which the REIT can purchase the property property of Bally’s Twin River on line casino in Lincoln, RI earlier than the tip of 2026 for $735 million, down from a beforehand agreed upon $771 million. Preliminary annual hire can be $58.8 million.
“As part of the modification, GLPI might be granted a proper to name the Lincoln Transaction starting in October 2026, coinciding with the scheduled maturity of Bally’s revolving credit score facility. All such transactions are topic to required regulatory approvals,” in line with the press launch issued by the gaming firm.
GLPI already owns the property related to Bally’s Tiverton On line casino & Resort. The REIT’s current New England footprint consists of the Tiverton venue, the Hollywood On line casino Resort in Bangor, Maine, and Plainridge Park On line casino in Plainville, Mass., each of that are operated by Penn Leisure (NASDAQ: PENN).
