Penn National Gaming Joint Venture Submits Proposal for $225 Million Racing and Gaming Facility in Western Pennsylvania
WYOMISSING & MAHONING TOWNSHIP, Pa.--(BUSINESS WIRE)-- Penn National Gaming, Inc. (PENN: Nasdaq) (the "Company") announced today that the Company and Endeka Entertainment LP submitted a proposal to the Pennsylvania Gaming Control Board ("PGCB") for the development of a $225 million integrated racing and gaming facility (inclusive of $66.5 million of licensing fees) in Mahoning Township, Pennsylvania, subject to customary regulatory approvals.
The proposed Lawrence Downs Casino and Racing Resort will feature a new harness racing facility; approximately 1,250 slot machines at opening with capacity for 1,500; approximately 40 live table games and 10 poker tables; a variety of food and beverage options; and surface parking for 2,000 vehicles. Lawrence Downs Casino and Racing Resort would be located in Mahoning Township near the intersection of State Route 551 and State Route 422, approximately 60 miles north of Pittsburgh.
Pursuant to the terms of the agreements, Penn National will provide the $50 million license fee bond and the Company will fund $15 million through a loan. The Company will also acquire a warrant to purchase a one third ownership interest in the business. Penn National will develop and manage the project. Following construction, the parties anticipate that Gaming and Leisure Properties, Inc., the real estate investment trust that, subject to regulatory approval, will be publicly traded and hold substantially all of Penn National's real property assets following the proposed separation of the Company's operating assets from its real property assets, will purchase the facility and lease it back to the owner.
"Endeka Entertainment is pleased to partner on this project with Penn National Gaming, the nation's leading racing and gaming company," said Manuel Stamatakis, the initial Managing General Partner of Endeka. "We are particularly pleased to bring this economic development project to Lawrence County as it will generate a significant number of new local jobs and other benefits."
"With 11 wholly owned or joint venture pari-mutuel racing facilities, Penn National owns the most racing facilities of any operator in North America. The Company has a long-standing commitment to the growth of horseracing in Pennsylvania and the proposed Lawrence Downs Casino and Racing Resort is a clear indication of our belief in the industry's future," said Tim Wilmott, President and Chief Operating Officer of Penn National Gaming. "We look forward to working with Manny Stamatakis and the principals at Endeka Entertainment to bring the excitement of world-class harness racing and first-class gaming entertainment to Mahoning Township and its surrounding communities in Western Pennsylvania."
"The success of Hollywood Casino at Penn National Race Course illustrates the strong economic and employment benefits that integrated gaming and racing facilities can create for the local community and this proposed project will benefit from the combination of Penn National's extensive record of successful development of new properties and our strong balance sheet."
About Penn National Gaming
Penn National Gaming owns, operates or has ownership interests in gaming and racing facilities with a focus on slot machine entertainment. The Company presently operates twenty-nine facilities in nineteen jurisdictions, including Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Pennsylvania, Texas, West Virginia, and Ontario. In aggregate, Penn National's operated facilities currently feature approximately 34,800 gaming machines, approximately 850 table games, 2,900 hotel rooms and approximately 1.6 million square feet of gaming floor space.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may vary materially from expectations. Although Penn National Gaming, Inc. and its subsidiaries (collectively, the "Company" or "PENN") believe that our expectations are based on reasonable assumptions within the bounds of our knowledge of our business and operations, there can be no assurance that actual results will not differ materially from our expectations. Meaningful factors that could cause actual results to differ from expectations include, but are not limited to, risks related to the following: the proposed separation of PropCo from PENN, including our ability to timely receive all necessary consents and approvals; our ability to secure timely gaming, racing and local permits and approvals necessary for construction; construction factors, including delays, unexpected remediation costs, local opposition and increased cost of labor and materials; our ability to reach agreements with organized labor and horsemen groups; our ability to agree to terms with partners for transactions such as this and the costs and risks involved in the pursuit of such opportunities; our expectations for the continued availability and cost of capital; and other factors as discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K as filed with the SEC. The Company does not intend to update publicly any forward-looking statements except as required by law.
Penn National Gaming, Inc.
William J. Clifford, 610-373-2400
Chief Financial Officer
Joseph N. Jaffoni, Richard Land
KEYWORDS: United States North America Pennsylvania
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