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Golden Entertainment to sell Rocky Gap Casino at $260M

Century Casinos and New-York based real estate investment trust, VICI Properties have agreed to form a strategic alliance. They are negotiating a purchase price of $260 million in cash with Golden Entertainment in order to acquire the Rocky Gap Casino Resort in Flinstone, Maryland.

“The addition of Rocky Gap is another important milestone in our pursuit to acquire prime US assets. With this acquisition and our pending acquisition of the Nugget Casino Resort in Nevada, we will oversee a US portfolio that reaches from east to west,” Erwin Haitzmann and Peter Hoetzinger, Co-Chief Executive Officers of Century Casinos remarked. “We are looking forward to working with the Maryland Lottery and Gaming Control Agency to obtain gaming approvals and with the casino leadership and team members to effect a smooth transition and great future for Rocky Gap,” they concluded.

Century Casino would pay $56 million for the operating rights to the venue. If the plan goes through, VICI will pay over $204 million to purchase the real estate assets that are situated in Rocky Gap State Park. The real estate investment trust (REIT) and the operator of the casino will modify a lease agreement that was previously in place. It will now include the casino in Maryland, along with an initial rental payment of $15.5 million per year.

“The purchase price for the casino operations represents an implied 2021 earnings before interest, taxes, depreciation and amortization (EBITDA) multiple of 4.9x,” according to a statement issued by Colorado-based Century.

According to the reports of various news outlets, the sale was made public during a meeting of the Maryland Lottery and Gaming Control Commission. Officials from Golden Entertainment did not answer any queries that were posed by state regulators because the transaction is still in the pending stage. The transaction is anticipated to be finalized in the following year. Both the purchase and the new operator will require the approval of the state regulators in Maryland.

The gaming floor at the casino in Flintstone, Maryland spans 25,000 square feet, and the property also features 198 hotel rooms and five dining establishments. Golden Entertainment made a recent investment in the casino refurbishment project of approximately $10 million. It features a golf course, an events center that’s 5,000 square feet in size, and a number of different outdoor recreation venues over its 270 acres of land near Lake Habeeb.

More than half a million people travelled to Rocky Gap in 2021, helping the city’s economy grow to $78 million in net operating revenue.

Caesars Palace in Las Vegas, Nevada is one of the 43 gaming locations that belong to VICI Properties, which also owns other properties. Casinos that are owned by Century Casinos can be found in the states of Colorado, West Virginia, Missouri, and Alberta in Canada. Golden Entertainment is the owner of nine of Nevada’s casinos.

The sale of Rocky Gap provides Century and Golden with possibilities to enhance their respective portfolios. In the case of the VICI Properties, the number of properties in its portfolio would increase to 11 with the completion of the transaction in Maryland and the acquisition of the Nugget Sparks casino in Sparks, Nevada for $195 million, which was announced earlier.

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