GLPI Claims ‘Well Prepared’ For US Gaming Restart

Gaming and Leisure Properties (GLPI) claims to be “well prepared” for the future resumption of U.S. gaming operations, with real estate investment trust not expecting any rent escalators throughout 2020 due to mandated casino closures across the country.

The comments come as the company publishes a financial statement for the first quarter of the year, a period during which all portfolio properties were closed by mid-March with reopenings “subject to factors outside the control of the company.”

With a portfolio of investments in 44 gaming and related facilities, including Hollywood Casino Baton Rouge, wholly-owned and run, and Hollywood Casino Perryville, GLPI has furloughed 86 percent of the latter two workers.

The group saw a modest 1.53 percent decrease in sales to $283.5 m during the first quarter of the year (2019: $287.9 m), net income fell 4.1 percent to $96.9 m (2019: $93 m), and adjusted EBITDA stayed stable at $258.8 m.

GLPI emphasises the importance “on maintaining a strong balance sheet, liquidity, and financial flexibility through an indefinite period of property closures and an expected lengthy ramp up to normalised operation.”

Peter Carlino, chairman and CEO of GLPI, commented: “In the face of the COVID-19 outbreak, GLPI management quickly took several prudent measures to bolster our already strong balance sheet, enhance liquidity, and provide incremental financial flexibility.

“Although COVID-19 has had an unprecedented impact on our tenants’ operations and the national economy at large, the future performance of our national platform of regional gaming real estate remains a critical component of state budgets across the country given their significant generation of gaming and other tax revenues and source of employment.

“We are well prepared for when the properties in our portfolio re-open and start the process of returning to normalised operations and believe our geographically diversified regional portfolio will play an important role in the recovery process.”

GLPI recently secured $307.5 m in rent credits for the purchase of Tropicana Las Vegas Casino Hotel Resort real estate properties from Penn National Gaming.

The non-cash rent payment plan is to be implemented in May, June, July, August, October and a part of November 2020 for current lease agreements.

The deal will also see Penn shed the land relating to his gaming complex under construction in Morgantown, Pennsylvania, in exchange for $30 m in rent credits, subject to regulatory approval.

In turn, Penn will also be given the exclusive right to buy the operations of GLPI’s Hollywood Casino Perryville, in Perryville, Maryland, for $31.1 m, a contract that expires on December 31, 2020.

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