Two Indiana casinos to get new owners in deals worth $3.3B

December 18, 2017

Belterra Casino Resort in Switzerland County and Ameristar Casino in East Chicago are changing hands as part of a larger, three-company deal as the gaming industry seeks to diversify and cut costs at the same time.

Pinnacle Entertainment—which owns Belterra and Ameristar—is being snapped up by Penn National Gaming Inc. in a deal worth about $2.8 billion.

Penn already owns Hollywood Casino in Lawrenceburg, which means it must divest at least one property. Indiana law prohibits companies from owning more than two casino licenses in the state (although race-track based casinos in Anderson and Shelbyville are not included in the rules).

So as part of the deal, Boyd Gaming Corp. is buying Belterra and three other Penn National properties.

The transactions will need approval from the Indiana Gaming Commission.

Penn is spending $20 in cash for each share, and Pinnacle shareholders will also get 0.42 shares of Penn for each Pinnacle share they own. The stock-and-cash bid is worth an implied $32.47 per share, the companies said.

Boyd will purchase the Ameristar St. Charles and the Ameristar Kansas City, both in Missouri, as well as the Belterra Casino Resort in Indiana and Belterra Park in Cincinnati. Boyd will pay $575 million for those assets.

Penn says its combined company will have 41 properties in North America, not including those acquired by Boyd. The company also expects about $100 million in annual cost savings as a result of the deal.

"The combined company will benefit from enhanced scale, additional growth opportunities and best-in-class operations, creating a more efficient integrated gaming company," said Penn CEO Timothy J. Wilmott.

In morning trading, Pinnacle Entertainment shares added 32 cents to $31.27. Penn National shares dipped 32 cents to $29.37, and Boyd Gaming shares rose $1.46, or 4.5 percent, to $33.78.

The move comes just a month after Las Vegas-based Caesars Entertainment Corp. said it would pay $1.7 billion in cash to purchase Indianapolis-based Centaur Holdings LLC and its Hoosier Park and Indiana Grand casinos and race tracks in central Indiana.

The move would give Caesars, one of the world’s largest gambling companies, control over four of Indiana’s five top casinos, when measured by gambling revenue. It also ready owns two Horseshoe-branded casinos in Indiana—one on the Ohio River and one on Lake Michigan.

That deal still needs approval from the Indiana Gaming Commission and Indiana Horse Racing Commission.


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