(PRNewsfoto/Twin River Worldwide Holdings, )

Twin River Buys Evansville Casino From Caesars With Zero Investment

Article by : Helen Nov 10, 2020

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Updated: Feb 3, 2023

Twin River Worldwide Holdings is a major corporation that operates nine casinos in five states today, owns a racetrack, and has 13 authorized OTB licenses in Colorado. Twin River has over 3600 members and operates more than 10000 slot machines or VLTs, over 300 gaming tables, and near 1200 hotel rooms.

The organization recently announced that it had signed an agreement to purchase Tropicana Evansville Casino from Caesar Entertainment, Inc. But unlike previous deals, this one will not cost the company a penny, at least not yet. This acquisition would cost them 140 million dollars, but everything will be done without any cash costs for Twin River under the terms of the deal.

Favorable Contract Conditions

The fact is that the company entered into a trilateral transaction, including an investment estate fund Gaming and Leisure Properties Inc (GLPI). Under the deal, GLPI will buy Evansville casino for $340 million and lease it to Twin River for $24 million a year, with possible price increases depending on escalation.

As a result, Twin River will repurchase Evansville. Casino’s reported EBITDA (earnings before interest, taxes, depreciation, and amortization) in 2019 was $32 million, multiplied by 4.4x, and adjusted for rent. Under the deal, GLPI will buy the Twin River property in Dover, Delaware, for $144 million and rent it back to Twin River for $12 million per annum, depending on price increases and escalation.

The Outcome For Each Party

We are pleased to form an official relationship with Twin River as it represents another top operator that will complement the evolving GLPI platform. Our new Master Rent with Twin River will have a solid rental contract at an accretive rate and is the result of the hard work of our team in building and executing a complex transaction that benefits both parties.

These transactions will further diversify our portfolio by adding a new operator and expanding our presence in Delaware. This is a profitable transaction for all parties without exception. As a result, Twin River gets a new casino – along with “unlimited access rights” to sports casino betting and iGaming skins without paying cash. Caesar receives $480 million in cash for selling his two GLPI casinos, and GPLI, in turn, gets two new properties that will generate total annual revenue of $36 million from the date of receipt.

Was It Worth It For Twin River To Buy A New Casino?

In the prehistory of the Tropicana Evansville sale, it was likely to be sold when Indiana regulators said they were concerned about the state’s “economic concentration” of the casino market after the merger of Eldorado and Caesar. The Indiana Gaming Commission has forced Eldorado Resorts and Caesars Entertainment to sell three casinos to get approval for the merger.

Evansville Tropicana has a 79,000-square-foot facility, including a 45,000-square-foot casino, four dining rooms, races and sportsbooks, and the back of the house. The complex also includes 11,000 square feet of meeting rooms situated near the casino and opposite Riverfront Event Center, which includes 10,000 square feet of meeting rooms overlooking the Ohio River.
Upon acquiring this facility and taking into account the four additional facilities currently under contract, Twin River will operate 15 properties in ten states. The acquisition is expected to be completed in the middle of 2021, providing the necessary regulatory approvals with other customary closing rules being obtained.

George Papanir, president and CEO of Twin River, said the opportunity to start operations in Indiana was the main reason for closing the deal: “This deal is in line with our primary strategy to acquire strategic gaming assets at an attractive price and, importantly, represents our entry into the 10th state”.