Sports betting is on the horizon in the Wolverine State, and on Tuesday the Michigan Gaming Control Board approved a casino operator with robust sports betting experience for involvement in the Detroit casino market.
At its regularly scheduled hearing, the MGCB approved the transfer of interest of Greektown Casino, LLC to Penn National Gaming Inc. The Board also approved VICI Properties Inc. as a licensed gaming supplier.
In November, PNG announced that it had entered into a deal to acquire Greektown from JACK Entertainment, LLC, owned by prominent billionaire Dan Gilbert.
PNG agreed to acquire the operations of the casino for about $300 mm in cash. As part of the deal, PNG said it would lease the casino from VICI Properties. The lease will have an initial annual rent of about $55.6 mm and an initial term of 15 years, with four five-year renewal options, PNG said last year.
VICI Properties agreed to acquire the real estate for $700 mm.
“The acquisition of the Greektown Casino-Hotel operations from JACK Entertainment, LLC will further expand Penn National’s already diverse operating base with a facility that is extremely well-positioned in one of the nation’s largest regional gaming markets,” PNG CEO Timothy Wilmott said at the time.
Deal came amid gaming expansion talks
The acquisition was brokered as Michigan was on the cusp of legalizing online casino gambling, before a veto by the governor late last year. State lawmakers are trying to pass a bill again this year.
Wilmott and PNG didn’t make explicit reference to sports betting when announcing the deal, but you can definitely infer that sports betting was on the company’s mind.
“Greektown is the only casino in the heart of downtown, and we look forward to welcoming patrons from the many nearby attractions, such as Comerica Park, Ford Field, Little Caesars Arena, the city’s theater district, GM’s Renaissance Center, and the Cobo Conference Center,” he said.
Greektown could have a successful brick-and-strick sportsbook, based on its location. It will have stiff competition with MGM Grand Detroit, of course. The third Detroit casino is the MotorCity Casino Hotel, owned by Ilitch Holdings, owner of the Red Wings and Tigers. It will be a three-way arms race for Detroit sports betting dominance.
Greektown has a built-in disadvantage by currently having the smallest piece of the Detroit gaming market, with just 23% market share. It has major ground to make up.
In addition to b&m sportsbooks, Michigan is likely to approve online/mobile bets.
Penn National’s sports betting experience
Upon closing the Greektown transaction, PNG’s portfolio of casinos will increase to 41 properties in 19 jurisdictions sprinkled around the United States.
One of those properties was the first legal sportsbook to open in the state of Pennsylvania, which came last November. PNG also has a pair of casinos in Las Vegas, equipped with sports betting. Same goes for Mississippi and West Virginia, which both kicked off legal sports betting last year.
PNG has a property in Indiana, which recently legalized sports betting and expects to see bets this fall.
Additionally, PNG has properties in Illinois, Maine, Massachusetts, Missouri, and Ohio, all of which are considering legalizing sports wagering.
The PNG-Greektown deal is expected to close Thursday, according to the Detroit Free Press.
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