WYOMISSING, PA-Penn National Gaming, Inc. has gotten the go-ahead from four regulatory agencies to proceed with separation of its operating assets and real property.
Penn National owns, operates or has interests in gaming and racing facilities with a focus on slot machines. The Company currently has 28 facilities in 18 jurisdictions, including New Jersey and Pennsylvania; numerous Midwestern and southern states; and Ontario, Canada.
In total, the company operates 34,500 gaming machines, 850 table games, 2,900 hotel rooms and 1.6 million square feet of gaming floor space.
The Pennsylvania Gaming Control Board and Missouri Gaming Commission Thursday approved the steps necessary to implement the planned separation. Also, the Ohio Casino Control Commission approved the transactional aspects of the planned separation, and is expected to take other steps at its September meeting. Earlier, the Kansas Racing and Gaming Commission approved the planned separation.
Last November, Penn National announced its intent to pursue a plan to separate its assets into two publicly traded companies – an operating entity, Penn National Gaming, and a newly formed entity that is intended to become a publicly traded real estate investment trust, GLPI.
The company has received a private letter ruling from the Internal Revenue Service related to tax treatment and the qualification of GLPI as a REIT. The transaction is contingent on receipt of approvals from gaming regulators in states where it is required.
A preliminary registration statement for GLPI was filed with the U.S. Securities and Exchange Commission for the proposed changes.
The company is pursuing the approval process set by each of the 27 regulatory agencies that have jurisdiction over its gaming and racing operations. If all conditions are met, the company plans to execute the separation of assets in the fourth quarter of 2013.
Penn National officials said they expect the remaining agencies - including the Indiana Gaming Commission, the Illinois Gaming Board, the Maine Harness Racing Commission, the Maryland Lottery Commission and the Ohio Casino authority – to consider the issues in September.
Based on Penn National Gaming's current real estate portfolio, GLPI is expected to initially own the real estate associated with 19 casino facilities, which have a total of over 2,900 acres of land and 6.6 million square feet of building space. GLPI would lease back to Penn National Gaming 17 of these casino facilities and own and operate two gaming facilities in Baton Rouge, LA, and Perryville, MD.
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