Gaming and Leisure Properties Further Diversifies Holdings with Tioga Downs Purchase

Gaming and Leisure Properties, Inc. (GLPI) has acquired the real estate assets of Tioga Downs Casino Resort in Nichols, New York from American Racing & Entertainment, LLC for $175 million. The acquisition was financed by a combination of cash reserves and $20 million in equity. The agreement also includes an initial annual rent of $14.5 million, with an 8.3% capitalization rate and annual escalations.

The Tioga Downs property spans approximately 162 acres and features a variety of amenities, including a 32,600-square-foot gaming floor, a FanDuel sportsbook, a 160-room hotel, a harness horse track, food and beverage outlets, and a championship golf course.

GLPI’s chairman and CEO, Peter Carlino, expressed excitement about adding Tioga Downs to their portfolio and emphasized the strategic value of the property. He also highlighted the potential partnership with American Racing. American Racing’s founder and CEO, Jeff Gural, echoed Carlino’s sentiments, noting Tioga Downs’ strong market position and resilience against potential gaming expansion in the downstate New York region.

This acquisition aligns with GLPI’s strategy of targeting stable markets with limited competition. Prior to the Tioga Downs acquisition, GLPI owned the real estate assets of 61 gaming venues across 18 states, solidifying its position as a prominent real estate investment trust (REIT) in the gaming industry.

The transaction also reflects the common practice of sale-leaseback arrangements in the gaming sector, which benefit both operators and real estate companies. For operators like American Racing, these deals provide the opportunity to unlock the value of real estate assets while retaining operational control. Meanwhile, for real estate companies like GLPI, these agreements offer a steady income stream and diversification of assets.

Analyst Barry Jonas from Truist Securities indicated that GLPI is optimistic about potential mergers and acquisitions in 2024, citing management’s positive outlook and balance sheet flexibility. Additionally, GLPI aims to prioritize tax-motivated transactions domestically and is open to exploring international opportunities, particularly in the tribal gaming market. The company also has ongoing interest in properties like Bally’s and Queen Baton Rouge.