Penn National Gaming has undertaken several measures amid the COVID-19 outbreak, including furloughing 26,000 employees nationwide and hoping to see an uptick in poker and online gambling in Pennsylvania.
Penn National Gaming Sells Tropicana Las Vegas Casino
Poker in Pennsylvania will be one of the segments that will hopefully pick up after the nation-wide closer of all land-based gambling. Yet, the land-based segment is preparing to enact swift reforms in order to cushion the economic morose that will follow the global pandemic that has brought gambling to a grinding halt. In line with that, one of PA’s largest gaming companies, Penn National Gaming, is selling its Tropicana Las Vegas Casino.
The company will sell the property to Gaming & Leisure Properties, a spinoff real estate investment trust created by Penn National themselves. This strategy aligns well with а broader move in the gaming industry whereby most brands are foregoing ownership of real estate and opting to lease venues instead.
Following MGM’s Example of Asset-Light Portfolio
Previously, MGM, another established brand, announced that it would sell a number of properties, including the MGM Resorts’ Bellagio and Circus Circus Las Vegas. The move was called a shift towards “asset-light strategy,” and came on time, as the world was hit by a economic-suspending pandemic.
MGM similarly sold a stake in MGM Grand and Mandalay Bay to MGM Growth Properties, a real estate investment trust it has set up itself.
Back to Penn National, the casino has sold the Tropicana Casino to GLPI for $337.5 million issued in non-cash rent payments. The deal also includes a ground lease for an expected casino project in Pennsylvania. In return, Penn National may acquire a GLPI casino property in Maryland if the company chooses to.
Difficult Times for Penn National Gaming
Coping with the suspension of the casino industry across the U.S. is a challenge in itself. Penn National has been one of the few companies to try and hold onto its employees. However, the company will now have to furlough 26,000 people nationwide.
Some 860 people will be kept on as they are “mission critical” staff members who need to stay onboard to keep the company running. A number of executives have foregone remuneration and set up a trust that collected ca $1.3 million to help workers going out of work, still not enough.
Casinos Not to Restart Operations Recently
With casinos shut down, the gambling industry is suffering. Nevada is hoping to see casinos return to some semblance of normality sooner rather than later. Jim Murren, a former MGM CEO and head of the COVID-19 Response, Relief & Recovery Task Force in Nevada has been focusing on aiding health authorities to contain and offer adequate treatment for the virus.
MGM Resorts and Wynn Resorts have been two of the most active brands in the Silver State to have taken the relief effort seriously and mobilized resources accordingly.