Penn Entertainment says land-based Hollywood Casino to replace Ameristar Casino

PENN Entertainment (PENN) (GLPI) announced plans for an expected $180M-$200M project to relocate its Ameristar Casino Hotel Council Bluffs riverboat casino operations to a new land-based property to be rebranded as Hollywood Casino Council Bluffs. The proposal was approved by the Iowa Racing and Gaming Commission this morning in conjunction with a 15-year extension of Ameristar’s partnership with the nonprofit Qualified Sponsoring Organization Iowa West Racing Association. All commercial operators in Iowa are required to have an operating agreement with a QSO licensed to conduct gaming operations. Under the proposed plan, the new Hollywood Council Bluffs is expected to include roughly 125,000 square feet of new development with approximately 58,000 square feet of gaming space and more than 1,000 positions on a single level. The new facility will complement the existing ESPN BET sportsbook, 160-room hotel and dining options in the landside portion of the current infrastructure. The existing riverboat, which presently offers gaming spread out over three levels, will be vacated upon opening of the new property. “We are pleased to add another landside relocation to our pipeline of development projects,” said Todd George, Executive Vice President of Operations for PENN. Construction of the new facility is expected to take approximately 18-24 months following the design and permitting approval process. The company is entitled to obtain financing for the project from Gaming and Leisure Properties (GLPI) of up to $150M at a 7.10% cap rate, which may be structured at PENN’s option as either rent or a 5-year term loan that is pre-payable at any time without penalty.