Penn National Gaming Buys Greektown Casino in Detroit

Greektown Casino Detroit Penn National Gaming

Dan Gilbert, a prominent Detroit native despite owning the Cleveland Cavaliers, bought Greektown Casino in 2013.

The $1 billion purchase of Greektown Casino-Hotel by Penn National Gaming promises to create new competition in the Detroit gaming industry.

Greektown Casino, which had been branded over the past couple of years with Dean Gilbert’s Jack Casino logo, competes with MGM Grand Detroit and MotorCity Casino Hotel.

Eric Schippers assured Greektown’s customers and employees that Penn National’s purchase of the casino assures continuity.

Schippers said that the casino will retain the same name and all the property’s restaurants will remain open under the same name.

He added that the 1800-strong workforce can be assured their jobs are safe. The new owners of Greektown do not plan to cut jobs at the Detroit resort.

Dan Gilbert Sells Greektown

Though people have speculated that the Jack Casino brands in Cincinnati, Cleveland, and Detroit had disappointing revenue figures, Dan Gilbert does not appear to be selling due to business concerns.

Instead, the speculation is Dan Gilbert — the Quicken Loans billionaire and Detroit native who owns the Cleveland Cavaliers — wants to buy the Detroit Tigers.

To do so, Gilbert needs to sell his casino assets. While the NBA approves casino owners for ownership of their franchices, Major League Baseball has a much stricter policy. Gilbert might not buy the Detroit Tigers, but he has no chance to acquire his beloved hometown team if he does not divest himself of the Jack Casino brand.

Greektown Casino

Most reviews of the purchase indicate that the Greektown Casino sale is a good sign for the business. Penn National Gaming, a Pennsylvania-based casino and racetrack operator with a national portfolio, brings a new rewards program and a strategy tested from Massachusetts to Nevada.

Alex Calderone, the managing director of the Calderone Advisory Group, told the Detroit Free Press, “Their portfolio is a good home for Greektown. Penn National is a solid operator, with a battle-tested track record.”

Pinnacle Entertainment Acquisition

Penn National Gaming has been in an acquisition phase lately. Earlier this year, Penn National Gaming bought Pinnacle Entertainment’s casino properties in a $1.8 million deal. After months of squabbling with the Missouri Gaming Commission over monopoly concerns in the St. Louis market, the deal eventually was approved last month.

The company bought Tropicana Hotel & Casino on the Las Vegas Strip in 2015. The casino, famous for hosting the Rat Pack in the 1950s and 1960s, sold for $360 million. Penn National also owns M Resort Henderson in the Las Vegas area.

Penn National’s Satellite Casinos

Meanwhile, back in Pennsylvania, Penn National spent $60 million on satellite casino bids to acquire two new Category 4 casino licenses. The Hollywood Casino York and the Hollywood Casino Morgantown will join Penn National’s original Hollywood Casino in Reading in the coming two years.

Calderone says Greektown Casino’s rewards points will transfer to the Penn National Gaming rewards program when the sale is final in early 2019. Greektown casino club members will be able to use their points in Penn National’s 40 casinos across the United States.

Gaming & Leisure Properties

Those familiar with the Hollywood Casino brand in their areas might wonder what connection they have to Penn National Gaming. In 2013, Penn National created Gaming & Leisure Properties as a real estate investment trust (REIT) as a corporate spin-off.

In the years since, Gaming & Leisure Properties has bought 44 casinos across the United States. It leases 42 of them to other operators, including 10 Hollywood Casino properties in 7 different states. G&L Properties also owns mutliple versions of Ameristar Casinos, Argosy, Boomtown, and L’Auberge.