Casino Queen said it has reached a deal to buy Hollywood Casino Baton Rouge for $28.2 million, a move that comes about two weeks after the Midwest riverboat operator announced a deal to buy the Belle of Baton Rouge.
Gaming and Leisure Properties Inc., which owns Hollywood, said it will still go ahead with plans to move the downtown casino onto land. GLPI will continue to own the Hollywood Casino real estate and lease it to Casino Queen.
The sale is expected to close in the second half of 2021.
If both deals go through, Casino Queen would own two of the city's three casinos.
Las Vegas casino giant Caesars Entertainment said it has reached an agreement to sell the Belle of Baton Rouge riverboat casino to CQ Holding …
In a statement, Terry Downey, president and chief executive officer of Casino Queen, said the transaction gives the company an opportunity to expand its regional footprint into Baton Rouge.
“We feel that with sports betting coming on, along with traditional gaming, we have a lot to offer to our valued customers,” Downey said.
Mike Noel, chairman of the Louisiana Gaming Control Board, said companies have owned more than one casino in the same market. Caesars owns Harrah’s Louisiana Downs and Horseshoe, both in Bossier City. But he said the Casino Queen deal “does pose questions.”
“There are going to be questions we need to dig into,” he said.
Casino Queen, based in East St. Louis, Illinois, has two Midwest riverboat casinos: DraftKings at Casino Queen in East St. Louis, Illinois, and Casino Queen Marquette in Marquette, Iowa.
The deal that would put the Belle of Baton Rouge in the hands of Casino Queen opens the door for the downtown riverboat's potential rebranding…
The company announced on Dec. 1 it had reached a deal to buy the Belle of Baton Rouge from Caesars Entertainment for an undisclosed price. That transaction is set to close in mid-2021, pending regulatory approval.
One of the things that may make it easier for Casino Queen to own two Baton Rouge properties is the dominance of L’Auberge, which accounts for nearly two-thirds of the local market share. According to figures from the Louisiana Gaming Control Board, for the fiscal year that ended June 30, L’Auberge brought in $123.5 million in adjusted gross revenue, compared to $43.1 million for Hollywood and $20.7 million for the Belle.
As of Oct. 31 in the current fiscal year, L’Auberge has posted $51 million in adjusted gross revenue, far ahead of the $17.5 million Hollywood generated and the $5.3 million brought in by the Belle.
Noel said the gaming commission will look at market share in making a decision on the sale, but also look at the effect potential upgrades to Hollywood and the Belle could have on the market. Hollywood is planning to spend up to $25 million to move onto land. The move also involves adding a sports bar/entertainment venue with seating for 250, a sports viewing area and a Shaquille O’Neal’s Big Chicken Restaurant. Now that East Baton Rouge Parish voters have approved sports betting, either the sports bar or viewing area could easily be converted into a sports book.
The Belle has long talked about moving casino operations into its 80,000-square-foot atrium next to the riverboat. The property is currently renovating its 288-room hotel, set to reopen in 2021.
Through the Casino Queen sale, there's the possibility of a DraftKings-branded sports book moving into Hollywood and the Belle. DraftKings already has a marketing agreement with Casino Queen. And the daily fantasy sports business has gotten aggressive in recent years about putting its name on legal sports books.
“Maybe with those changes, they’ll be able to compete a little better at the two downtown casinos,” Noel said.
The two downtown riverboats are less than a mile and a half from each other. Davis Rhorer, executive director of the Downtown Development District, said that’s the perfect opportunity for a company to come in and take over both properties.
“They can re-evaluate and see what they need to do,” he said. “It’s a great investment for downtown.”
GLPI said it has reached a long-term deal to have a master lease for Hollywood and DraftKings at Casino Queen. Casino Queen will pay an initial rent of $21.4 million on the two riverboats. The rent at Hollywood will be bumped up once the land-based casino opens in early 2022 to reflect a yield of 8.25% on GLPI’s costs.
GLPI also announced it was selling Hollywood Casino in Perryville, Maryland, to Penn National Gaming. GLPI was spun off of Penn National in November 2013 to act as a real estate investment trust, although it did own and operate Hollywood Casino Baton Rouge and the Maryland casino.
Hollywood Casino Baton Rouge plans to move gambling operations off its downtown riverboat into an expanded land-based facility in February 2022.
Peter Carlino, chairman and chief executive officer of GLPI, called the moves “bittersweet."
“We are confident that they are in good hands with the new operators of these properties and will continue to shine under Penn National and Casino Queen,” he said in a statement. “By retaining the real estate of both Perryville and Baton Rouge, and continuing the development on the expansion in Baton Rouge, we retain a vested interest in their future.”
GLPI owns the Belle of Baton Rouge’s real estate as well as the property that L’Auberge Baton Rouge sits on.