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In Detroit, Michigan, Dan Gilbert, the proprietor of Jack Entertainment, has successfully secured two purchasers for Greektown Casino-Hotel. Penn National Gaming and Vici Properties have reached an agreement to acquire the property at a substantial value of $1 billion.
About nine months ago, Gilbert initiated discussions with Penn National and Vici Properties, contrary to the rumors circulating a few months ago that he was attempting to sell the casino.
According to Gilbert, the closure of the deal is anticipated to take place in 2019, as he informed the Detroit Free Press. Despite the presence of “significant regulatory hurdles,” he expressed confidence that obtaining approval from the Michigan Gaming Control Board would not be problematic.
About Greektown Casino
There are 400 hotel rooms, a gaming floor spanning 100,000 square feet, and a total of 1,800 employees at Greektown Casino-Hotel.
In 2013, Gilbert became the owner of the casino, purchasing it for a staggering sum of around $600 million. Since then, he has tirelessly poured in millions of dollars for renovations and enhancing the property.
Detroit’s other commercial casinos, namely MGM Grand Detroit and MotorCity Casino Hotel, consistently outperform the casino, placing it in third position in terms of gaming revenue.
In September, Greektown generated a gaming revenue of $27 million, capturing 23 percent of the market share. Furthermore, the property yields significant earnings from its three restaurants, three bars, and five quick-service food establishments.
In a press release issued by VICI Properties, John Payne, the president and chief operating officer, highlighted the significance of Greektown and its value in the recent announcement of the deal.
Greektown, being the sole casino in Detroit’s renowned Central Business District, enjoys an ideal location with its 30-story hotel tower. The downtown area of Detroit is experiencing significant benefits from massive investments in residential, commercial, entertainment, and cultural infrastructure, amounting to billions of dollars.
The eight-acre property enjoys the advantage of being located near renowned sports and entertainment venues that host Detroit’s four major sports teams. It is also in close proximity to iconic destinations like GM’s Renaissance Center and the Cobo Center.
After the sale is finalized, Penn National will lease the property from Vici Properties for a duration of 15 years, with a total value of $55.6 million.
Gilbert stated that Penn National intends to retain the existing employees with comparable compensation 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. He stated to Crain’s Detroit Business that they believed they had achieved a significant portion of their goals and obtained a favorable price for the acquisition.
Gilbert investing in Detroit
Not only was Gilbert born in Detroit, but he also remained in the Wolverine State for his education, including attending Wayne State University Law School in Midtown Detroit. Currently, 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 as a defensive move. Greektown had recently emerged from bankruptcy and was being poorly managed by the bondholders for two and a half years before our acquisition. It would have had significant negative consequences for downtown had Greektown gone bankrupt. If the casino had been located in the outskirts or suburbs, we wouldn’t have considered purchasing it. Our intention was to contribute to the development of downtown and thus decided to buy it. However, it is likely that the casino’s current value accurately reflects its worth as a business.
The rumor mill is buzzing once more as Gilbert finds himself with an additional billion dollars, with speculators suggesting his interest lies in acquiring the Detroit Tigers.
Gilbert, who currently possesses the NBA’s Cleveland Cavaliers, is unable to own the Tigers due to Major League Baseball regulations that forbid ownership in the event that his company owns other casinos. Cullen stressed that the notion that the sale of Greektown was aimed at enabling the purchase of the Tigers is simply untrue.
Gilbert’s intention is to reinvest a portion of the proceeds into his beloved city, Detroit.
Our main focus will be on fostering business development and technology, particularly in the start-up scene of Detroit. We aim to highlight remarkable ventures such as StockX and other thrilling businesses that will generate employment opportunities, ignite enthusiasm, and draw individuals from various locations to our city.
