Two weeks after announcing it would buy the Belle of Baton Rouge, the Illinois-based riverboat operator Casino Queen is moving forward with plans to also buy the operations of Hollywood Casino.
Gaming and Leisure Properties, the company that owns the physical real estate of Baton Rouge’s three riverboat casinos, announced Tuesday morning that it had entered into a definitive agreement to sell the operations of Hollywood Casino for $28.2 million. Like the Belle, GLPI plans to retain ownership of all real estate assets at Hollywood Casino and would enter into a master lease for the property. Per the deal, the master lease would include a St. Louis property as well as the Hollywood Casino property in downtown Baton Rouge. Rent will be initially set at $21.4 million per year and the lease will have an initial term of 15 years, with four five-year extensions.
Also as part of the deal, GLPI would also have a right of first refusal with Casino Queen for other sale leaseback transactions up to $50 million over the next two years. GLPI will still complete the previously announced development project to move Hollywood Casino onto land and the rent under the master lease will be adjusted upon delivery to reflect a yield of 8.25% on GLPI’s project costs.
The transaction is expected to close in the second half of 2021, subject to regulatory approvals and other customary closing conditions.