Penn National Gaming will acquire Hollywood Casino Perryville for $31.1 million in cash as it looks to take advantage of newly authorized sports betting opportunities in Maryland.
Penn National said Tuesday that it reached an agreement with Gaming and Leisure Properties Inc. to acquire the operations of the Cecil County casino. It will lease the casino property from Gaming and Leisure for about $7.77 million a year.
“With the recent approval of sports betting through the overwhelming passage of Question 2 on Election Day, Maryland is expected to soon become a significant retail and mobile sports betting market,” said Jay Snowden, Penn National’s president and CEO, in the announcement.
Maryland voters approved a referendum allowing sports wagering in the state last month, joining neighboring states Delaware, Pennsylvania and West Virginia as well as the District of Columbia.
But before any bets can be placed, the General Assembly must develop and approve a structure for sports betting in Maryland that would outline how and where fans could wager, what types of businesses could apply for licenses and how revenue would be shared with the state.
Allowing fans to bet on teams or players is expected to generate $18.2 million per year for the state from both in-person and mobile betting if sports gambling revenue is taxed at 20%, according to a state analysis.
Penn National developed the Perryville casino in 2010, the first in the state. Gaming and Leisure took over ownership of the Perryville facilty in 2013 when Penn National split its casino operations from its real estate.
The deal announced Tuesday would enable Penn National to expand its omni-channel gaming platform, which allows customers to use the same account wherever they gamble, including the Barstool-branded retail sportsbook and mobile app.
Penn Interactive operates retail sports betting as well as online social casino, bingo and iCasino products. It entered into a partnership with Barstool Sports in February in which Barstool promotes Penn National’s land-based and online casinos and sports betting products, including the Barstool Sportsbook mobile app, to a national audience.
Penn National plans to add sports betting in Perryville under the Barstool Sportsbook brand as well as launch the Barstool mobile app in the state. Timing would depend upon regulations that have yet to be passed.
“2021 could be a really big year for gaming, if the vaccine works and with sports betting being rolled out in places like Maryland and the possible expansion of mobile gaming,” said James Karmel, a history professor and gaming analyst at Harford Community College and the author of “Gambling on the American Dream: Atlantic City and the Casino Era.”
The General Assembly still must decide questions such as which businesses would offer sports betting.
“Right now there’s a presumption that every casino will have a sportsbook operation, but we don’t know for sure,” Karmel said.
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The state could allow sports betting apart from casinos, at horse racing tracks, for example, he said.
Decisions also need to be made regarding mobile sports gambling, a fast-growing segment of casinos’ revenues that could help boost the state’s casinos, Karmel said.
“It makes a lot of sense for sports gaming to be able to take place on mobile devices,” a trend that has been accelerated during the coronavirus pandemic, he said.
Sports betting has been expanding since 2018, when the U.S. Supreme Court struck down a federal law that banned some states from offering it, effectively allowing states to decide for themselves. Maryland’s largest casinos have long pushed for legalization.
The deal for the Perryville casino is expected to close by the middle of next year and requires approval of the Maryland Lottery and Gaming Control Commission.
Penn National operates 41 properties in 19 states and offers retail and online gaming, live racing and sports betting entertainment. Its casinos and hotels have a total of 50,000 gaming machines, 1,300 table games and 8,800 hotel rooms, operating under brands such as Hollywood, Ameristar and L’Auberge.