GLPI Acquires Tioga Downs Casino Resort, Seals $14.5 Million Annual Rent Agreement

Gaming and Leisure Properties, Inc. (GLPI) recently announced the acquisition of Tioga Downs Casino Resort in Nichols, New York from American Racing & Entertainment, LLC for $175 million. As part of the acquisition, GLPI agreed to an initial annual rent of $14.5 million, representing an 8.3% capitalization rate. The lease also includes annual escalations of 1.75% after the first year and a fixed 2.0% escalation starting in year fifteen. GLPI financed the transaction using a combination of cash reserves and $20 million in equity.

Tioga Downs Casino Resort, sprawling over approximately 162 acres, features a 32,600-square-foot gaming floor with 895 slots and 29 table games, a FanDuel sportsbook, a 160-room hotel, a harness horse track, food and beverage outlets, and a championship golf course.

Peter Carlino, chairman and CEO of GLPI, expressed his enthusiasm about the addition of Tioga Downs to their portfolio and the strategic value of the property. He also mentioned the prospective partnership with American Racing, stating, “Our initiatives to further expand our portfolio remain active in the current environment as our reputation as the gaming landlord of choice is strengthened.”

Jeff Gural, founder and CEO of American Racing, echoed Carlino’s sentiments, emphasizing Tioga Downs’ strong market position and its resilience against potential gaming expansion in the downstate New York region.

This acquisition aligns with GLPI’s strategy of targeting stable markets with limited competition. Prior to the acquisition, GLPI owned the real estate assets of 61 gaming venues across 18 states, emphasizing its status as a prominent real estate investment trust (REIT) in the gaming industry.

Analyst Barry Jonas from Truist Securities indicated that GLPI is optimistic about potential mergers and acquisitions in 2024, citing management’s positive outlook and balance sheet flexibility. Additionally, GLPI aims to prioritize tax-motivated transactions domestically while cautiously exploring international opportunities, with interest in the tribal gaming market. The company is also open to restructuring leases and maximizing property values, with ongoing interest in properties like Bally’s and Queen Baton Rouge.

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