Real estate investment trust VICI Properties said late Friday it completed its $843.3 million acquisition of two Ohio casinos and leased the properties back to the former owner.
The New York-based company, which was spun-off off from Caesars Entertainment in 2017, said the all-cash deal for the Jack Cleveland Casino and the Jack Thistledown racetrack casino marked the company’s 28th and 29th gaming property.
Detroit based Jack Entertainment, which owned the two casinos, will lease the operations back from VICI for total annual rent of $65.9 million through an initial 15-year agreement and four five-year tenant renewal options.
The agreement with Jack Entertainment marks VICI’s fifth tenant relationship. The company has lease agreements for gaming properties operated by Caesars, Penn National Gaming, Hard Rock International and Century Casinos.
VICI President John Payne said in a statement the transaction increased the company’s presence in Ohio, where it owns the Hard Rock Cincinnati. He called the state “one of the healthiest gaming markets across the country.”
Ohio’s 11 casinos took in a record $1.94 billion in gambling revenue in 2019, up 4.2%, or $77.6 million, from $1.86 billion in 2018.
Jack Cleveland Casino was Ohio’s No. 3 gaming revenue producer in 2019, with $221.1 million, trailing MGM Northfield Park racino with $253.6 million, and Hollywood Casino Columbus with $229.2 million.
Jack Cleveland Casino opened in May 2012 in the historic downtown Higbee Building. The property has a 96,000-square-foot casino with 1,300 gaming machines, a 120 table games and eight food and beverage outlets. The property is connected to the 205-room Ritz-Carlton and 440-room Renaissance hotels in downtown Cleveland.
Jack Thistledown Racino opened in April 2013 in North Randall and is the leading thoroughbred racetrack casino in the Cleveland area. The property occupies 129 acres and has a 57,000-square-foot casino with 1,459 gaming machines and six food and beverage outlets.
VICI is in the process of raising more than $2.5 billion in new debt because of the REIT’s involvement in the merger between Eldorado Resorts and Caesars. VICI said $2 billion will be used to complete several transactions that are part of the $17.3 billion Eldorado-Caesars deal.
The remaining proceeds will be used to pay off in full $498.5 million in debt due in 2023.
As part of the merger, three Caesars properties under the Harrah’s brand in Atlantic City, Laughlin, Nevada and New Orleans were sold to VICI for a combined $1.8 billion. VICI will lease the operations back to Eldorado for total annual rent of $154 million.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
