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In Detroit, Michigan, Dan Gilbert, the proprietor of Jack Entertainment, has successfully found two purchasers for Greektown Casino-Hotel. Penn National Gaming and Vici Properties have both agreed to acquire the property in a transaction worth an impressive $1 billion.
Several months ago, reports started circulating about Gilbert’s potential casino sale. However, the truth is that Gilbert had actually initiated discussions with Penn National and Vici Properties approximately nine months ago.
According to Gilbert, the closure of the deal is anticipated to be in 2019 as he mentioned to the Detroit Free Press. Despite the presence of “significant regulatory hurdles,” obtaining approval from the Michigan Gaming Control Board is not expected to be problematic.
About Greektown Casino
The Greektown Casino-Hotel boasts a total of 400 hotel rooms, spanning across a vast 100,000 square feet of gaming floor area, while also employing a dedicated workforce of 1,800 individuals.
In 2013, Gilbert took ownership of the casino for a hefty sum of around $600 million. Since then, he has poured in millions of dollars for renovations and enhancing the property.
The casino often ends up in third position for gaming revenue, trailing behind Detroit’s other commercial casinos, namely MGM Grand Detroit and MotorCity Casino Hotel.
In September, Greektown generated $27 million in gaming revenue, capturing a significant 23 percent share of the market. Moreover, the property also boasts considerable earnings from its three restaurants, three bars, and five quick-serve food locations.
The deal was announced by VICI Properties in a press release, where John Payne, the president and chief operating officer, highlighted the significance of Greektown’s value.
Greektown, the sole casino situated in Detroit’s esteemed Central Business District, enjoys an advantageous position with its 30-story hotel tower. The downtown area of Detroit is experiencing significant benefits from substantial investments in residential, commercial, entertainment, and cultural infrastructure, amounting to billions of dollars.
The property spans across eight acres and enjoys the advantage of being situated near top-notch sporting and entertainment venues, which serve as the home base for Detroit’s four major sports teams. Additionally, it is conveniently close to renowned destinations like GM’s Renaissance Center and the Cobo Center.
Upon the completion of the sale, Vici Properties will enter into a 15-year lease agreement with Penn National for the property, valued at $55.6 million.
Gilbert stated that Penn National will maintain the current employees’ compensation at a comparable level to what they are presently receiving.
According to Matt Cullen, CEO of Jack Entertainment, Penn had been intermittently interested in the Greektown casino for several years. Cullen expressed satisfaction with the progress made and stated that they were able to secure a favorable price.
Gilbert investing in Detroit
Not only was Gilbert born in Detroit, but he also remained in the Wolverine State for his college education, attending Wayne State University Law School in Midtown Detroit. Presently, he resides in Franklin, which is approximately a 30-minute drive from the city.
Gilbert discussed the driving force behind his decision to acquire Greektown.
We primarily purchased it for defensive purposes above all else. Greektown had recently emerged from bankruptcy under the bondholders, and their management was not efficient. The potential closure of Greektown would have had a detrimental impact on the downtown area. If the casino was located on the outskirts or in the suburbs, we would not have acquired it. Our intention was to contribute to the development of downtown, hence we proceeded with the purchase. However, currently, the casino’s business value is likely at its peak.
The rumor mill is buzzing once more as Gilbert, with an additional billion dollars in his pocket, is speculated to have a keen interest in acquiring the Detroit Tigers.
Gilbert, who currently possesses the NBA’s Cleveland Cavaliers, cannot acquire ownership of the Tigers due to Major League Baseball regulations. These rules restrict him from owning the team as his company also holds ownership of other casinos. Cullen made it clear that the notion of selling Greektown to facilitate the purchase of the Tigers is simply not true.
Gilbert’s intention is to reinvest a portion of the proceeds into his beloved city, Detroit.
Our primary attention will be directed towards business development and technology, with a particular emphasis on the burgeoning start-up industry in Detroit. We will explore dynamic enterprises such as StockX, among others, that not only generate employment opportunities but also create a sense of enthusiasm, drawing individuals from various locations to our city.
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