Bally's Corp. has entered into a binding term sheet with GLP Capital, the operating partnership of Gaming and Leisure Properties, to acquire the real property assets of Bally's two Rhode Island casino properties—Bally's Twin River Lincoln Casino Resort and Bally's Tiverton Casino & Hotel—subject to customary regulatory approvals, with Lincoln also subject to lender consent.
Pursuant to the terms of the transaction, Bally's will immediately lease back both properties and continue to own, control and manage all the gaming operations of the facilities on an uninterrupted basis. Total consideration for the acquisition is $1 billion.
Both properties are expected to be added to the existing Bally's master lease between GLP and Bally's, with incremental rent of $76.3 million. The master lease has an initial term of 15 years (with 14 years remaining) followed by four five-year renewals at the tenant's option. Normalized rent coverage on the master lease—which includes Bally's Dover (Del.) Casino Resort; Bally's Evansville (Ind.) Casino & Hotel; Bally's Quad Cities Casino & Hotel in Rock Island, Ill.; and Bally's Black Hawk (Colo.) Casinos—is expected to be 2x in the first calendar year following the completion of the acquisition of the real property assets of Bally's Rhode Island properties.
GLP also agreed to prefund, at Bally's election, a deposit of up to $200 million, which will be credited or repaid to GLP at the earlier of closing and Dec. 31, 2023. In addition, Bally's will pay a $9 million transaction fee at closing.
If all third-party consents and approvals for the acquisition of Lincoln are not timely received, then GLP will instead acquire the real property assets of the Hard Rock Hotel & Casino Biloxi in Mississippi along with Tiverton for total consideration of $635 million and a combined annual rent for Tiverton and Biloxi of $48.5 million. In that event, GLP will also have the option, subject to receipt of required consents, to acquire the real property assets of Lincoln prior to Dec. 31, 2024, for a purchase price of $771 million and additional rent of $58.8 million.