Casino Real Estate Monopoly Coming to St. Louis
Gaming and Leisure Properties will now be the only landlord for each of the retail casinos in the St. Louis area. This announcement came after the Missouri Gaming Commission changed their mind and allowed this to take place.
Eldorado Resorts was looking to sell the property assets of Lumiere Place to Gaming and Leisure Properties, but the Missouri Gaming Commission had previously denied the request. That changed on Tuesday when the MGC voted in favor of the move by a count of 4-1.
Eldorado Resorts will maintain operating control over Lumiere Place, but they will now have a landlord. This move gives Gaming and Leisure Properties (GLPI) ownership and control over all six of the casinos in St. Louis.
The Missouri Gaming Commission did not want GLPI to have a monopoly over the St. Louis area, but they eventually decided to let the transaction take place. Eldorado Resorts added Lumiere Place in 2018 as part of a massive acquisition, but their plan was always to sell the property.
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Eldorado Resorts also agreed to spend at least $12.5 million in upgrades at Lumiere Place over the next five years. It is unclear if Eldorado Resorts is hoping to continue to operate the casino, or eventually turn over that part of the business as well.
GLPI and Eldorado Resorts have a long history of working together, and both sides were willing to give up some control as a part of this negotiation. GLPI agreed to not raise the rent on any of the properties operated by Eldorado Resorts through 2021 in an effort to get this deal to go through.
Most contracts call for rent being raised each year, but Eldorado Resorts was able to secure a commitment from GLPI. These two companies also have similar deals in other states throughout the country, and Eldorado Resorts has been giving up more control over these properties as well.
Gaming Commissioner Dan Finney was the lone person that voted against the transaction, and he cited monopoly concerns for his vote. Finney was also on the commission in 2018 when the MGC voted against the sale.
Monopoly Years in the Making
The GLPI monopoly in St. Louis is a few years in the making, and they were able to get control over the casinos in a variety of ways. GLPI already owned the Casino Queen in East St. Louis and the Ameristar St. Charles prior to 2018.
Penn National Gaming acquired Pinnacle Entertainment in 2018, and that acquisition brought the River City Casino into the portfolio of GLPI. Penn National Gaming is the largest tenant of GLPI, and they already owned and operated two other casinos in the St. Louis area as well.
The Casino Argosy Alton and the Hollywood Casino in Maryland Heights are the other two properties owned by Penn National Gaming, giving GLPI control over six different properties. Even though there are four different operators running the six casinos, the Missouri Gaming Commission was still worried about giving GLPI this much control.
Still No Sports Betting
The state of Missouri is still working on sports betting legislation, but things have come to a standstill due to the coronavirus pandemic. Lawmakers and industry experts agree that sports betting will likely come at some point, but it might not happen until 2021.
There are two of the six properties in the St. Louis area that can explore sports betting. Argosy Casino Alton has already received a temporary sports betting license in Illinois, and the Casino Queen is eligible to offer sports betting as well.
If sports betting were to come to Missouri, all six casinos in the St. Louis area would likely become betting hot spots.