(Bloomberg)—Quicken Loans Inc. founder Dan Gilbert agreed to sell his Detroit casino to Penn National Gaming Inc. and Vici Properties Inc. in a deal valued at $1 billion.
Penn will pay $300 million and run the Greektown Casino Hotel, the companies said Wednesday. Vici, a publicly traded real estate investment trust, will pay $700 million and own the property. The billionaire continues to own casinos in Cleveland and Cincinnati.
The accord extends a wave of acquisitions in the casino industry, fueled in part by the emergence of REITS, which are able to pay higher prices for properties. The U.S. Supreme Court’s legalization of sports wagering in May has added to the industry’s growth prospects.
Gilbert acquired Greektown in 2013, not long after it was in bankruptcy. Employee morale, and investment in the property, were both flagging. The casino is adjacent to other Gilbert holdings in Detroit, where he continues efforts to revive downtown.
The deal is expected to close by the middle of next year.
Shares of Penn Gaming, based in Wyomissing, Pennsylvania, rose as much as 11 percent to $21.92 in New York. JPMorgan Chase added the stock to a focus list. Vici gained as much as 1 percent to $21.69.
Under Gilbert’s ownership, management remodeled the rooms and added a food court to the casino, which still carries $400 million in debt. The sale will free up cash that can further his investments in technology and property and create more jobs, Gilbert said.
“We feel like we’ve done our job in Greektown,” he said.
Bloomberg reported in September that Gilbert was considering the sale of his casino properties.
The billionaire, who also owns the Cleveland Cavaliers basketball team, got into the gambling industry as part of efforts to revive struggling downtowns in older U.S. cities. He backed a 2009 ballot measure to legalize casinos in Ohio and opened his first property in the historic Higbee’s department store building in downtown Cleveland three years later.
His gambling-focused business, Jack Entertainment, has interests in casinos and racetracks, including Jack casinos in Ohio and Greektown. He’s worth an estimated $6.8 billion, according to the Bloomberg Billionaires Index.
To contact the reporter on this story: Christopher Palmeri in Los Angeles at [email protected] To contact the editors responsible for this story: Nick Turner at [email protected] Rob Golum
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