The Jack Detroit Casino-Hotel Greektown was never meant to be. The planned rebranding of Greektown Casino-Hotel will now be forgotten, as instead owner Dan Gilbert has confirmed rumors he is leaving the casino game. His company, Jack Entertainment, will now be turning over operations to Penn National Gaming.
This is in some ways only a minor acquisition for Penn National, as it currently controls about 40 other properties, but it is a major shakeup for Detroit. The city has only three commercial casinos to speak of, so it’s worth taking a moment to explore some facts about the company that is penetrating this market and what might be in store for Michigan as a result.
Who is Penn National?
For decades the operator has run the Penn National Race Course in Grantville, Pennsylvania. In the mid-90s the company began expanding and acquiring other racetracks and casinos throughout the country including the Hollywood Casino brand in 2003.
In 2008 the Hollywood Casino at Penn National Race Course opened, bringing the company full circle with a new casino at the site of its original racetrack. The last decade has seen many additional acquisitions, most notable the purchase of Pinnacle Entertainment last month for nearly $3 billion, which significantly increased the number of properties Penn National controls.
The company is also poised to commit to sports betting in a big way, as Penn National became one the first operators granted a license to open a sports book in Pennsylvania on October 3, with hopes to go live in the next month. It also has half-ownership of Freehold Raceway in New Jersey, which experienced delays in launching its own sports operation but still intends to begin taking wagers during the current football season.
What will this Penn National Greektown look like?
Currently Greektown Casino is a distant third place out of the three properties in the Detroit market, but still boasts revenue superior to either of Penn National’s casinos in Pennsylvania (the Meadows and Hollywood, which sit in the middle of the pack in the PA market). This likely is in large part due to the urban location, but there are many factors.
It would be far-fetched to assume Penn National could find an easy path to improve upon Greektown Casino-Hotel so much that it climbs above the heavy local competition, as least not without significantly upgrading the casino in ways that would require a great deal of time and investment. But it’s very reasonable to assume the experienced operator can take this profitable property and make it even more lucrative.
The new operator has indicated it hopes to arrange a seamless transition, which should not affect the nearly 2,000 jobs the casino and hotel provides in Detroit. The day-to-day operations in Greektown will likely be largely unchanged, except in that the property now finds itself part of a major network of Penn National casinos.
If this change results in the rebranding of the site as Hollywood Casino Greektown, it will likely also begin to offer the Marquee Rewards loyalty program, where points earned can reward gamblers with comps and benefits at any of the Hollywood properties in the network.
Does this make gambling expansion any more likely in Michigan?
This development improves the odds that we will see online gambling and sports betting in Michigan sooner that we otherwise would have.
Penn National has been a major supporter of Pennsylvania’s online gambling expansion, and has aggressively sought iGaming and sports wagering options. It is unlikely the operator would be pursuing this market so eagerly if it wasn’t confident in those options opening up in Michigan as well.
It’s also important to note that, under its previous management, Greektown would have had a serious conflict with opening a full sportsbook. Dan Gilbert is also a co-owner of the Cleveland Cavaliers, which could likely have prevented or at least caused a serious impediment to offering wagering on NBA games. Penn National will be able to completely circumvent this issue.
The acquisition also very slightly increases the existing extremely slim chance that there may be movement on the issue before the end of the year. The state legislature has only about a dozen days scheduled to work left in the lame-duck session, but rumors have begun circulating that the Detroit casinos are entreating the governor to initiate action before he leaves office.
While this isn’t particularly likely, it’s not impossible. It would, of course, result in heavy backlash from the tribal casinos which would be left in a terrible position, unable to participate until their compacts could all be individually renegotiated. But it would be extremely lucrative and advantageous for the commercial casinos – who would take quick action to capitalize on the window.
In this scenario Penn National would not immediately benefit as much, since the company will not fully transition into operating Greektown until the middle of next year. Still, the potential boost from a less competitive market could still be enough to justify the company throwing its support behind such an aggressive move.
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