Jack Ohio Casino Sale
JACK Cleveland Casino, Thistledown Sold For $843 Million - Cleveland, OH - The properties will be sold to VICI Properties, pending regulatory approval, the company announced. Excitement of the casino to the comfort of your home! 756-8248 International / Local: 513-469-6486 100 Office Park Drive, Fairfield (Cincinnati) OH 45014.
Change of ownership
JACK Entertainment has closed the sale of its JACK Casino in Cincinnati to Hard Rock International and VICI Properties. The news was announced only a couple of days after Hard Rock got approval as a new casino operator in the state, which was issued by the Ohio Casino Control Commission during its monthly meeting.
Hard Rock got approval as a new casino operator in the state
As part of the deal worth $745m, VICI Properties acquires the subsidiary of JACK, which is the owner of the casino property. This part of the agreement is in itself worth $558m. VICI Properties is a real estate investment trust which is an offshoot of Caesars Entertainment.
Leasing agreement
VICI Properties has a leasing agreement in place with Hard Rock International, which will be the casino operator and the owner of all of the gaming assets. The gaming assets deal was worth $187m.
The leasing agreement will see Hard Rock lease the property for $42.75m annually. This is a 15-year lease agreement initially, with options to extend it for four five-year periods.
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What the future holds
The CEO of JACK Entertainment, Mark Dunkeson, spoke about the winding up of this sale. He said he is confident Hard Rock International will take the casino to the next level. This comes after JACK Entertainment spent “10 years and hundreds of millions of dollars of investment developing JACK Cincinnati Casino from the ground up.”
Turfway sale not closed
The deal to sell the Cincinnati Casino was originally agreed upon in April. The Kentucky racetrack Turfway Park, situated about twenty minutes away from Cincinnati, was supposed to be included in the package.
However, the Turfway sale is still in the works and will take another few months to complete. This is mainly because the Kentucky Horse Racing Commission still needs to give the deal the green light. The price of the Turfway sale is in the region of $35m.
Potential competition
There is a potential spanner in the works for the Turfway deal, due to the fact that the Churchill Downs racing facility in Kentucky is getting a $200m investment.
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This would see thoroughbred racing at the track, as well as the installation of historical horse racing machines. The races held here would begin in 2020 and fall on the same dates as the Turfway events.
JACK and Hard Rock International are working as a team to try and stop these race clashes from happening. Hard Rock is willing to invest as much as $100m at Turfway for extensive renovations and the installation of historical horse racing machines.
It will be down to the Kentucky Horse Racing Commission to finalize the racing calendar for 2020. The Commission has been critical of the way JACK Entertainment managed the Turfway track in the past.
Downsizing of JACK Entertainment
The selling of the Cincinnati Casino is just one of a number of downsizing moves by JACK Entertainment. It already sold its Greektown Casino and Hotel in Detroit at the beginning of 2019. Penn National Gaming bought it for about $1bn.
one of a number of downsizing moves by JACK Entertainment
With the closing of the Cincinnati Casino sale and the pending sale of the Turfway racetrack, JACK will only have two properties left in its portfolio. These are the JACK Cleveland Casino and a racino called JACK Thistledown, which is near to Cleveland. JACK also has a stake in the Horseshoe Casino in Baltimore, but the company is also looking at leaving this market.
Due to the Greektown sale, 92 employees lost their jobs. The executive structure of the company has also been rearranged. Former CEO Matt Cullen was replaced by Dunkeson at the start of September. Cullen is still the chairman of the board at JACK Entertainment.
Online gambling deals
Despite liquidating a lot of its casino positions, JACK Entertainment is making some moves in the sports betting and online gambling markets.
It has signed a deal with the Kambi Group to power its online and retail sportsbooks. It also recently entered into a similar agreement with GAN for its online gambling operations.
Sports betting is not yet legal in Ohio, but JACK is looking to be well-positioned in case legislation gets approval on the matter.
A week after news broke that Cavs owner Dan Gilbert may be looking to sell off his casinos, the initial dust has settled on the reports. Gilbert's Jack Entertainment refusing to confirm or deny the Bloomberg report.
'It is JACK Entertainment's long-standing policy to not comment on rumors or speculation,' according to the JACK Entertainment statement.
While the article mentioned former Gilbert partner Caesars as a potential bidder for the properties including the Jack Casino in Downtown Cleveland and Jack Thistledown Racino in nearby North Randall, many believe the possible availability may have piqued the interest of others.
'There's going to be a lot of interest from many different parties,' said Roger Gros, the casino analyst and publisher of Global Gaming Business.
'There are a couple of companies out there that have been very aggressive, a company called El Dorado which owns Presque Isle Downs over in Pennsylvania, they also own Mountaineer Race Track in West Virginia, so they're familiar with the Ohio market. They would certainly be interested in the Ohio casinos,' Gros said.
'There's a lot of interest in the industry right now, the regional casinos are very successful now so he's really kind of selling at the top of the market. There's been a lot of talk about how long is this going to last, the good economy and once that kind of dips you're going to see the regional casinos die along with it so it is probably the best time for him to sell.'
Gros admits he was somewhat surprised by Gilbert looking to exit the casino world, a move that some have speculated could be tied to an interest on Gilbert's part to own either a pro football or baseball team since those leagues, unlike the NBA, don't allow team owners to own and operate casinos.
'They were building up a company here that was pretty dynamic, they learned a lot from Caesars,' Gros said of Gilbert's initial partner in his Ohio operations before parting ways with the creation of the Jack Entertainment brand.
While the U.S. Supreme Court's decision this spring opening the door to sports betting added another tool to casino arsenals, Gros doesn't believe in the end it plays all that much of a role in any casino owners decision to buy or sell at this point.
'Frankly it's not a big money maker for the casinos, it attracts people there to go to the bars and restaurants and if you have a hotel you stay in the hotel maybe for the big sports weekend but in terms of the money that is actually derived from sports betting? It's 2 or 3 percent at the most for any casino in terms of their gross gaming revenue and that's pretty insignificant,' Gros said.