Gaming and Leisure Properties, Inc.: Difference between revisions
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==== Balance Sheet ==== | ==== Balance Sheet ==== | ||
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==== <u>Income Statement</u> ==== | |||
Income Statement from 2023 Q2 report. | |||
''This table compares:'' | |||
* ''Q2 2023 vs Q2 2022 (Three Months Ended)'' | |||
* ''Half-year (HY) 2023 VS HY 2022 (Six Months Ended)'' | |||
{| class="wikitable" | {| class="wikitable" | ||
|+Consolidated Statement of Operations | |+Consolidated Statement of Operations | ||
! | ! | ||
! colspan="2" |Three Months Ended June 30 | ! colspan="2" |Three Months Ended June 30 (Q2) | ||
! colspan="2" |Six Months Ended June 30 | ! colspan="2" |Six Months Ended June 30 (HY) | ||
|- | |- | ||
!'''Revenues''' | !'''Revenues''' | ||
Revision as of 20:01, 12 August 2023
 | |
| Type | Public |
|---|---|
| Nasdaq: GLPI Russell 1000 Component | |
| Founded | November 1, 2013 |
| Headquarters | , |
| Revenue | $1.2 billion[1] (2020) |
| $506 million[1] (2020) | |
| Total assets | $9.0 billion[1] (2020) |
Number of employees | 560[2] (2020) |
| Website | glpropinc |
About GLPI
Gaming & Leisure Properties, Inc (GLPI) operates as a real estate investment trust (REIT) with a primary focus on obtaining real estate assets that are leased to gaming operators. Established in November 2013, GLPI emerged as a result of a corporate separation from Penn National Gaming, a prominent casino operator. Although headquartered in Pennsylvania, GLPI's expansive portfolio encompasses 59 gaming properties situated across 18 states. The predominant leasing structure employed is a triple-net lease, encompassing fundamental rent along with real property taxes, building insurance, and maintenance expenditures.
Considering that the majority, if not all, tenants are gaming operators, this study delves extensively into the gambling market, while also dedicating attention to real estate assets.
The Gambling market
As the REIT focuses on gaming properties (which are mostly casinos), we must address the gambling market.
The gambling industry can be categorized into verticals:
- Sports
- Racing
- Casino (which would include live casino: poker, roulette, blackjack)
- Slots
- Lottery
- Bingo
- Others (such as E-Sports and Virtual Sports)
It can be further classified by Channel-type:
- Land-Based
- Online (also referred to as ‘iGaming’).
- Omni-channel (both online and land-based. For example a jackpot slot game, where players are competiting for the same jackpot whether they play in-person or online)
A breakdown of GLPI's market & industry position
A gambling-focused REIT like GLPI is engaged in both the gambling and real estate markets.
Gambling market
- Channel: GLPI predominantly operates in the Land-based segment. While omni-channel products connecting online and land-based casinos are emerging, the evaluation of properties should primarily emphasize the 'offline' component.
- Verticals: REITs own 'gaming properties' - most of which are 'Land-based' casinos. Whilst there is a range of different segments in the gambling industry, typically in a casino you will find Slot machines, Casino tables (Poker, Roulette, Blackjack, etc), Sports betting and Bingo/Lottery/Scratch.
- The allure of Land-based casinos, particularly in Casino tables, Slot machines, and Bingo halls, stems from the sensory experiences these physical settings offer, which online counterparts cannot fully replicate. However, the emergence of Live Casino and the potential of Virtual Reality are also noteworthy, and will be explored in the Risks & Catalysts section.
Real Estate
Casinos are no longer gaming venues, they are now entertainment centres and some are resorts. A casino resort can include hotel rooms and entertainment services such as shopping centres, dining, music, recreation and business spaces. Casino go-ers now are far more interested in the Real Estate aspect of a casino, rather than the variety of gambling products on offer or Brand loyalty.
The realm of gambling has maintained its prevalence for millennia, with the land-based sector demonstrating remarkable resilience throughout this extended period. However, the notable rise of online gaming, accelerated by the impact of the Covid pandemic, might paradoxically act as a catalyst for the land-based market.
GLPI's property portfolio is exclusively concentrated within the United States. Interestingly, the US is an emerging contender in the global landscape of online gaming, harboring the potential to surpass both Europe and the rest of the world in this domain.
Today, casinos have evolved into multifaceted entertainment hubs featuring diverse amenities, including food courts and various facilities. This transformation has effectively redefined the casino as an establishment centered around enjoyment, rather than a mere avenue for financial gain. Within the industry, responsible gambling has taken center stage, encapsulated by the well-recognized adage, "When the fun stops, stop." The industry is undergoing a transformation by shifting its identity from 'gambling' to 'entertainment', and it is the land-based casinos that are leading the way in embracing this evolution.
Casino Operators & Casino brands
Casino operators oversee a collection of casinos operating under their brand, typically located in properties they either own or lease from a Real Estate Investment Trust (REIT) like GLPI.
Some of the largest (land-based) casino operators is the US are:
- Caesars Entertainment Corporation (Brands include: Caesars, Eldorado, Harrah's, Horseshoe, Tropicana)
- Isle of Capri Casinos (acquired by Caesars in 2017, when it was formerly known as Eldorado Resorts)
- MGM Resorts International (Brands include: MGM Grand, Bellagio, Luxor,etc)
- Las vegas Sands Corporation - Sold all US properties to focus on properties in Macau and Singapore.
- Wynn Resorts (Brands include: Wnn, Encore)
- Penn National Gaming (Brands include: Hollywood Casino, Ameristar, and Boomtown)
- Boyd Gaming Corporation (Brands include: Belterra, Diamond Jo, etc)
- Hard Rock International (Brands: Hard Rock Hotels)
- Golden Entertainment (Brands include: Golden Nugget, Arizona Charlie, Aquarius, etc)
- Rush Street Gaming (Brands include: BetRivers, Sugarhouse, Rushbet)
- Station casinos (Brands include: Station, Wildfire)
Leadership:
Management
Peter M. Carlino - CEO
Brandon J. Moore - COO, General Counsel and Secretary
Desiree A. Burke - CFO and Treasurer
Steven L. Ladany - Chief Development Office, Senior Vice President
Matthew Demchyk - Chief Investment Officer, Senior Vice President
Board of Directors
Peter M. Carlino - Chairman and CEO
JoAnne A. Epps - Acting President, Temple University
Carol Lili Lynton - Co-Founder and Operating Partner, The Dinex Group
Joseph W. Marshall III - Vice Chairman, Stevens & Lee, LLP
James B. Perry - Former Chairman and CEO, Isle of Capri Casinos
Barry F. Schwartz - Vice Chairman Emeritus, MacAndrews & Forbes Inc
Earl C. Shanks - Retired CFO, Essedant Inc
E. Scott Urdang - Restored CEO and Chairman, Urdang Capital Management
Strategy, Commitment & Ethos
Strategy and M&A
Despite being geographically diversified across the US, their portfolio only consists of gaming properties within the US. However, they are actively monitoring developmental opportunities to diversify portfolio by acquiring real property assets outside the gaming industry. This is evidenced recently as on May 13, 2023, the company entered into a letter of intent with Athletics Holdings LLC and Tropicana Las Vegas to develop a stadium for the Oakland Athletics MLB team on a portion of the Tropicana Site. GLPI will fund up to $175 million for construction costs.
Acquiring further gaming real estate assets and facilities still remains one of their top priorities. On January 3, 2023, the Company completed its acquisition of the real property assets of Bally's Tiverton and Hard Rock Hotel & Casino Biloxi for $635 million. The properties were added to the existing Master Lease with Bally's. They also have the option to acquire the real property assets of Bally's Twin River Lincoln Casino Resort in Lincoln, RI before December 31, 2026.
ESG, Commitment and Ethos
The company emphasizes environmental and community stewardship as an essential aspect of creating shareholder value. They are committed to integrating ESG practices that benefit the company, its employees, and the communities they operate in. Social responsibility is a priority, and they aim to maintain a corporate culture that fosters a sense of community, well-being, and long-term success for both the employees and the company.
Corporate culture and employee engagement are encouraged through town-hall meetings, open feedback culture, talent development programs, and resources for health and well-being. Diversity and inclusion are promoted, and they adhere to equal opportunity employment policies.
The company actively supports the communities in which they operate by partnering with various organizations for charitable contributions, community service, and donation programs to help families in need.
Environmental stewardship is also a focus, with an emphasis on sustainable practices, energy efficiency, recycling, water conservation, and indoor environmental quality at their properties. They promote awareness and encourage environmentally beneficial practices among their tenants as well.
Corporate governance is led by the Board of Directors, which considers the interests of all stakeholders, including the environment and social well-being, to ensure the long-term prosperity of the company. The Nominating and Corporate Governance Committee oversees sustainability and ESG matters, providing recommendations to the Board.
Competition
GLPI’s primary competitor is VICI Properties Inc (VICI), another Gambling REIT. MGM Growth Properties LLC (MGP) was also one of their competitors, until VICI acquired the firm in April 2022 for $17.2billion. They also face competition from Private investment companies, private equity, hedge funds, sovereign wealth funds, lenders and gaming operators themselves.
VICI
Vici Properties was established as part of the Chapter 11 bankruptcy reorganization of Caesars Entertainment Operating Company (CEOC), a significant division of Caesars Entertainment. Following CEOC's entry into bankruptcy proceedings in January 2015, Caesars proposed a division of CEOC into two distinct entities: a Real Estate Investment Trust (REIT) responsible for owning the company's casinos and an operating company tasked with their management. This strategic approach aimed to optimize value for CEOC's creditors by leveraging the favorable tax benefits associated with REITs.
The REIT spin-off, Vici Properties, was successfully completed on October 6, 2017, coinciding with CEOC's emergence from bankruptcy. Vici commenced with a portfolio encompassing nineteen casinos and racetracks, all leased to Caesars, along with four golf courses. The name "Vici" derives from the famous phrase "Veni, vidi, vici," attributed to Julius Caesar.
Over time, Vici expanded its portfolio and pursued various acquisitions. It acquired properties such as Harrah's Las Vegas, engaging in sale and leaseback arrangements. MGM Growth Properties expressed interest in acquiring Vici in 2018, though Vici opted for an initial public offering (IPO) instead. Vici successfully completed its IPO on the New York Stock Exchange, raising $1.2 billion.
The company continued its growth trajectory by engaging in acquisitions, transactions with Caesars, and strategic expansion into Canada in 2023. Vici acquired a range of properties, including casinos and resorts, adding to its diverse portfolio and expanding its influence within the gaming and hospitality sectors.
Portfolio
A list of the properties within GLPI's portfolio - please note GLPI has 59 propeties in the portfolio, 56 listed here and 3 others.
'Other Properties' figures are from the 2022 Annual report, whilst 'Tenant Occupied Properties' has been amended to include two new acquisitions that were complete in March 2023 (Bally's Tiverton and Hard Rock Casino Biloxi).
| Location | State | Acquisition date | Tenant Lease Agreement | Approx Property Square Footage | Owned Acreage | Leased Acreage | Hotel Rooms | |
|---|---|---|---|---|---|---|---|---|
| Tenant Occupied Properties | ||||||||
| Dover Downs | Dover, DE | DELAWARE | 06/03/2021 | Bally's Master Lease | 212,500 | 69.6 | — | 500 |
| Tropicana Evansville | Evansville, IN | INDIANA | 06/03/2021 | Bally's Master Lease | 754,833 | 18.4 | 10.2 | 338 |
| Black Hawk (Black Hawk North, West and East casinos) | Black Hawk, CO | COLORADO | 04/01/2022 | Bally's Master Lease | 118,552 | 3.2 | — | — |
| Quad Cities Casino & Hotel | Rock Island, IL | ILLINOIS | 04/01/2022 | Bally's Master Lease | 390,285 | 119.9 | — | 205 |
| Bally's Tiverton Hotel & Casino | Tiverton, RI | RHODE ISLAND | 01/03/2023 | Bally's Master Lease | 2,030,767 | 46.6 | 0 | 84 |
| Hard Rock Casino and Hotel Biloxi | Biloxi, MS | MISSISSIPPI | 01/03/2023 | Bally's Master Lease | 376,358 | 8.6 | 0 | 479 |
| Tropicana Las Vegas | Las Vegas, NV | NEVADA | 4/16/2020 | Bally's/ Tropicana Las Vegas Lease | — | 35.1 | — | — |
| Belterra Park Gaming & Entertainment Center | Cincinnati, OH | OHIO | 10/15/2018 | Boyd/Belterra Park Lease | 372,650 | 160 | — | — |
| Ameristar Kansas City | Kansas City, MO | MISSOURI | 4/28/2016 | Boyd/Boyd Master Lease | 763,939 | 224.5 | 31.4 | 184 |
| Ameristar St. Charles | St. Charles, MO | MISSOURI | 4/28/2016 | Boyd/Boyd Master Lease | 1,272,938 | 241.2 | — | 397 |
| Belterra Casino Resort | Florence, IN | INDIANA | 4/28/2016 | Boyd/Boyd Master Lease | 782,393 | 167.1 | 149 | 662 |
| Trop Casino Greenville | Greenville, MS | MISSISSIPPI | 10/01/2018 | Caesars/Amended Caesars Master Lease | 94,017 | — | 7.4 | — |
| Tropicana Atlantic City | Atlantic City, NJ | NEW JERSEY | 10/01/2018 | Caesars/Amended Caesars Master Lease | 4,232,018 | 18.3 | — | 2,364 |
| Tropicana Laughlin | Laughlin, NV | NEVADA | 10/01/2018 | Caesars/Amended Caesars Master Lease | 936,453 | 93.6 | — | 1,487 |
| Belle of Baton Rouge | Baton Rouge, LA | LOUISIANA | 10/01/2018 | Caesars/Amended Caesars Master Lease | 386,398 | 13.1 | 0.8 | 288 |
| Isle Casino Hotel Bettendorf | Bettendorf, IA | IOWA | 12/18/2020 | Caesars/Amended Caesars Master Lease | 738,905 | 24.6 | — | 509 |
| Isle Casino Hotel Waterloo | Waterloo, IA | IOWA | 12/18/2020 | Caesars/Amended Caesars Master Lease | 287,436 | 52.6 | — | 194 |
| Horseshoe St Louis | St Louis, MO | MISSOURI | 10/01/2018 | Caesars/Horseshoe St. Louis Lease | 807,407 | 18.5 | — | 494 |
| Casino Queen | St. Louis, IL | ILLINOIS | 1/23/2014 | Casino Queen Master Lease | 330,502 | 67.2 | — | 157 |
| Hollywood Casino Baton Rouge | Baton Rouge, LA | LOUISIANA | 12/17/2021 | Casino Queen Master Lease | 95,318 | 25 | — | — |
| Live! Casino & Hotel Maryland | Hanover, MD | MARYLAND | 12/29/2021 | Cordish Maryland Live! Lease | 2,326,669 | 12.6 | — | 310 |
| Live! Casino Pittsburgh | Greensburg, PA | PENNSYLVANIA | 03/01/2022 | Cordish/Pennsylvania Live! Master Lease | 129,552 | — | 1.8 | — |
| Live! Casino & Hotel Philadelphia | Philadelphia, PA | PENNSYLVANIA | 03/01/2022 | Cordish/Pennsylvania Live! Master Lease | 685,000 | 9.6 | — | 208 |
| Ameristar Black Hawk | Black Hawk, CO | COLORADO | 4/28/2016 | PENN/Amended Pinnacle Master Lease | 775,744 | 105.2 | — | 536 |
| Ameristar Council Bluffs | Council Bluffs, IA | IOWA | 4/28/2016 | PENN/Amended Pinnacle Master Lease | 312,047 | 36.2 | 22.6 | 160 |
| Ameristar East Chicago | Chicago, IN | INDIANA | 4/28/2016 | PENN/Amended Pinnacle Master Lease | 509,867 | — | 21.6 | 288 |
| Ameristar Vicksburg | Vicksburg, MS | MISSISSIPPI | 4/28/2016 | PENN/Amended Pinnacle Master Lease | 298,006 | 74.1 | — | 148 |
| Boomtown Bossier City | Bossier City, LA | LOUISIANA | 4/28/2016 | PENN/Amended Pinnacle Master Lease | 281,747 | 21.8 | — | 187 |
| Boomtown New Orleans | New Orleans, LA | LOUISIANA | 4/28/2016 | PENN/Amended Pinnacle Master Lease | 278,227 | 53.6 | — | 150 |
| L'Auberge Baton Rouge | Baton Rouge, LA | LOUISIANA | 4/28/2016 | PENN/Amended Pinnacle Master Lease | 436,461 | 99.1 | — | 205 |
| L'Auberge Lake Charles | Lake Charles, LA | LOUISIANA | 4/28/2016 | PENN/Amended Pinnacle Master Lease | 1,014,497 | — | 234.5 | 995 |
| Jackpot Properties (Cactus Petes and Horseshu) | Jackpot, NV | NEVADA | 4/28/2016 | PENN/Amended Pinnacle Master Lease | 419,800 | 79.5 | — | 416 |
| River City Casino & Hotel | St. Louis, MO | MISSOURI | 4/28/2016 | PENN/Amended Pinnacle Master Lease | 431,226 | — | 83.4 | 200 |
| Plainridge Park Casino | Plainville, MA | MASSACHUSETTS | 10/15/2018 | PENN/Amended Pinnacle Master Lease | 196,473 | 87.9 | — | — |
| Hollywood Casino at the Meadows | Washington, PA | PENNSYLVANIA | 09/09/2016 | PENN/Meadows Lease | 417,921 | 155.5 | — | — |
| Hollywood Casino Morgantown | Morgantown, PA | PENNSYLVANIA | 10/01/2020 | PENN/Morgantown Lease | — | 36 | — | — |
| Argosy Casino Alton | Alton, IL | ILLINOIS | 11/01/2013 | PENN/PENN Master Lease | 124,569 | 0.2 | 4 | — |
| Argosy Casino Riverside | Riverside, MO | MISSOURI | 11/01/2013 | PENN/PENN Master Lease | 450,397 | 37.9 | — | 258 |
| Boomtown Biloxi | Biloxi, MS | MISSISSIPPI | 11/01/2013 | PENN/PENN Master Lease | 134,800 | 1.5 | 1 | — |
| Hollywood Casino at Charles Town Races | Town, WV | WEST VIRGINIA | 11/01/2013 | PENN/PENN Master Lease | 511,249 | 298.6 | — | 153 |
| Hollywood Casino at Penn National Race Course | Grantville, PA | PENNSYLVANIA | 11/01/2013 | PENN/PENN Master Lease | 451,758 | 573.7 | — | — |
| Hollywood Casino Aurora | Aurora, IL | ILLINOIS | 11/01/2013 | PENN/PENN Master Lease | 222,189 | 0.4 | 1.7 | — |
| Hollywood Casino Bangor | Bangor, ME | MAINE | 11/01/2013 | PENN/PENN Master Lease | 257,085 | 6.4 | 37.9 | 152 |
| Hollywood Casino Columbus | Columbus, OH | OHIO | 11/01/2013 | PENN/PENN Master Lease | 354,075 | 116 | — | — |
| Hollywood Casino Gulf Coast | Bay St. Louis MS | MISSISSIPPI | 11/01/2013 | PENN/PENN Master Lease | 425,920 | 578.7 | — | 291 |
| Hollywood Casino Joliet | Joliet, IL | ILLINOIS | 11/01/2013 | PENN/PENN Master Lease | 322,446 | 275.6 | — | 100 |
| Hollywood Casino Lawrenceburg | Lawrenceburg, IN | INDIANA | 11/01/2013 | PENN/PENN Master Lease | 634,000 | 73.1 | 32.1 | 295 |
| Hollywood Casino St. Louis | Maryland Heights, MO | MISSOURI | 11/01/2013 | PENN/PENN Master Lease | 645,270 | 220.8 | — | 502 |
| Hollywood Casino Toledo | Toledo, OH | OHIO | 11/01/2013 | PENN/PENN Master Lease | 285,335 | 42.3 | — | — |
| Hollywood Casino Tunica | Tunica, MS | MISSISSIPPI | 11/01/2013 | PENN/PENN Master Lease | 315,831 | — | 67.7 | 494 |
| M Resort | Henderson, NV | NEVADA | 11/01/2013 | PENN/PENN Master Lease | 910,173 | 83.5 | — | 390 |
| Zia Park Casino | Hobbs, NM | NEW MEXICO | 11/01/2013 | PENN/PENN Master Lease | 109,067 | 317.4 | — | — |
| Hollywood Gaming Casino at Dayton Raceway | Dayton, OH | OHIO | 11/01/2013 | PENN/PENN Master Lease | 191,037 | 119.7 | — | — |
| Hollywood Gaming Casino at Mahoning Valley Race Track | Youngstown, OH | OHIO | 11/01/2013 | PENN/PENN Master Lease | 177,448 | 193.4 | — | — |
| 1st Jackpot Casino | Tunica, MS | MISSISSIPPI | 05/01/2017 | PENN/PENN Master Lease | 78,941 | 52.9 | 93.8 | — |
| Hollywood Casino Perryville | Perryville, MD | MARYLAND | 07/01/2021 | PENN/Perryville Lease | 97,961 | 36.3 | — | — |
| 30,196,457 | 5,207 | 800 | 14,780 | |||||
| Other Properties | ||||||||
| Other owned buildings and land (2022 figures) | 23,400 | 0.3 | — | — | ||||
| Total | 30,219,857 | 5,207 | 800 | 14,780 |
Portfolio: State analysis
A breakdown of the Tenant occupied properties by State:
| State | No. of properties | Sum of Property Sq footage | Sum of Owned Acreage | Sum of Leased Acreage | Sum of Hotel Rooms |
|---|---|---|---|---|---|
| COLORADO | 2 | 894,296 | 108 | 0 | 536 |
| DELAWARE | 1 | 212,500 | 70 | 0 | 500 |
| ILLINOIS | 5 | 1,389,991 | 463 | 5 | 462 |
| INDIANA | 4 | 2,681,093 | 259 | 212 | 1,583 |
| IOWA | 3 | 1,338,388 | 113 | 23 | 863 |
| LOUISIANA | 6 | 2,492,648 | 213 | 235 | 1,825 |
| MAINE | 1 | 257,085 | 6 | 38 | 152 |
| MARYLAND | 2 | 2,424,630 | 49 | 0 | 310 |
| MASSACHUSETTS | 1 | 196,473 | 88 | 0 | 0 |
| MISSISSIPPI | 7 | 1,723,873 | 716 | 170 | 1,412 |
| MISSOURI | 6 | 4,371,177 | 743 | 115 | 2,035 |
| NEVADA | 4 | 2,266,426 | 292 | 0 | 2,293 |
| NEW JERSEY | 1 | 4,232,018 | 18 | 0 | 2,364 |
| NEW MEXICO | 1 | 109,067 | 317 | 0 | 0 |
| OHIO | 5 | 1,380,545 | 632 | 0 | 0 |
| PENNSYLVANIA | 5 | 1,684,231 | 775 | 2 | 208 |
| RHODE ISLAND | 1 | 2,030,767 | 47 | 0 | 84 |
| WEST VIRGINIA | 1 | 511,249 | 299 | 0 | 153 |
| Grand Total | 56 | 30,196,457 | 5,207 | 800 | 14,780 |
As a percentage of the total portfolio:
| State | Properties | Square footage | Owned Acreage | Leased Acreage | Hotel rooms |
|---|---|---|---|---|---|
| COLORADO | 4% | 3% | 2% | 0% | 4% |
| DELAWARE | 2% | 1% | 1% | 0% | 3% |
| ILLINOIS | 9% | 5% | 9% | 1% | 3% |
| INDIANA | 7% | 9% | 5% | 27% | 11% |
| IOWA | 5% | 4% | 2% | 3% | 6% |
| LOUISIANA | 11% | 8% | 4% | 29% | 12% |
| MAINE | 2% | 1% | 0% | 5% | 1% |
| MARYLAND | 4% | 8% | 1% | 0% | 2% |
| MASSACHUSETTS | 2% | 1% | 2% | 0% | 0% |
| MISSISSIPPI | 13% | 6% | 14% | 21% | 10% |
| MISSOURI | 11% | 14% | 14% | 14% | 14% |
| NEVADA | 7% | 8% | 6% | 0% | 16% |
| NEW JERSEY | 2% | 14% | 0% | 0% | 16% |
| NEW MEXICO | 2% | 0% | 6% | 0% | 0% |
| OHIO | 9% | 5% | 12% | 0% | 0% |
| PENNSYLVANIA | 9% | 6% | 15% | 0% | 1% |
| RHODE ISLAND | 2% | 7% | 1% | 0% | 1% |
| WEST VIRGINIA | 2% | 2% | 6% | 0% | 1% |
Portfolio: Tenant Analysis
| Tenant Lease Agreement | No. of Properties | Sum of Approx Property Square Footage | Sum of Owned Acreage | Sum of Leased Acreage | Sum of Hotel Rooms |
|---|---|---|---|---|---|
| CASINO QUEEN | |||||
| Casino Queen Master Lease | 2 | 425,820 | 92 | 0 | 157 |
| 2 | 425,820 | 92 | 0 | 157 | |
| BALLYS | |||||
| Bally's Master Lease | 6 | 3,883,295 | 266 | 10 | 1,606 |
| Bally's/ Tropicana Las Vegas Lease | 1 | 0 | 35 | 0 | 0 |
| 7 | 3,883,295 | 301 | 10 | 1,606 | |
| BOYD | |||||
| Boyd/Belterra Park Lease | 1 | 372,650 | 160 | 0 | 0 |
| Boyd/Boyd Master Lease | 3 | 2,819,270 | 633 | 180 | 1,243 |
| 4 | 3,191,920 | 793 | 180 | 1243 | |
| CAESARS | |||||
| Caesars/Amended Caesars Master Lease | 6 | 6,675,227 | 202 | 8 | 4,842 |
| Caesars/Horseshoe St. Louis Lease | 1 | 807,407 | 19 | 0 | 494 |
| 7 | 7,482,634 | 221 | 8 | 5,336 | |
| CORDISH | |||||
| Cordish Maryland Live! Lease | 1 | 2,326,669 | 13 | 0 | 310 |
| Cordish/Pennsylvania Live! Master Lease | 2 | 814,552 | 10 | 2 | 208 |
| 3 | 3,141,221 | 23 | 2 | 518 | |
| PENN | |||||
| PENN/Amended Pinnacle Master Lease | 11 | 4,954,095 | 557 | 362 | 3,285 |
| PENN/Meadows Lease | 1 | 417,921 | 156 | 0 | 0 |
| PENN/Morgantown Lease | 1 | 0 | 36 | 0 | 0 |
| PENN/PENN Master Lease | 19 | 6,601,590 | 2,992 | 238 | 2,635 |
| PENN/Perryville Lease | 1 | 97,961 | 36 | 0 | 0 |
| 33 | 12,071,567 | 3777 | 600 | 5,920 | |
| Grand Total | 56 | 30,196,457 | 5,207 | 800 | 14,780 |
As a percentage of the total portfolio:
| Tenant group | Properties | Square footage | Owned Acreage | Leased Acreage | Hotel rooms |
|---|---|---|---|---|---|
| CASINO QUEEN | 4% | 1% | 2% | 0% | 1% |
| BALLYS | 13% | 13% | 6% | 1% | 11% |
| BOYD | 7% | 11% | 15% | 23% | 8% |
| CAESARS | 13% | 25% | 4% | 1% | 36% |
| CORDISH | 5% | 10% | 0% | 0% | 4% |
| PENN | 59% | 40% | 73% | 75% | 40% |
The majority of the properties are leased to Penn National Gaming operators, this is expected as GLPI was a corporate spin-off from Penn, so it inherited these properties at inception.
Risks & Catalysts
Market
Gambling Industry performance
The global gambling market was valued at approximate $449.04bn in 2022, having declined at a compund annual growth rate of -0.9% since 2017. This decline is largely due to covid lockdowns which affected the Gross Gaming Revenue (GGR) of the market in 2020. Whilst some regions, such as the US, recovered, others like Macau have not had a full recovery yet. The market is expected to grow from $449.04bn in 2022 to $765.89 billion in 2027 at a CAGR of 11.3%.[3]
Gambling in the US
The strength of the US gambling market has consistently prevailed. As of 2020, the top five global casino companies, ranked by revenue, were exclusively US-based entities, with MGM Resorts claiming the crown.[4]
Commercial gross gaming revenue (GGR) in the United States has demonstrated steady growth since the 2000s. The only instances of year-on-year decline occurred during the 2008 financial crisis and the Covid-related lockdown in 2020. However, in both scenarios, the market exhibited remarkable resilience, rebounding swiftly from these challenges. 2019 Revenue was ~$42bn at a ~4% YOY growth, in 2020 this declined to approximately -32%, but 2021 and 2022 the market recovered, with revenue exceeding $52bn and $60bn respectively.[5]
Real Estate: Casino Hotels in the US
GLPI possesses multiple properties featuring hotel accommodations, with the combined total of hotel rooms across its portfolio amounting to 14,780. The count of casino hotels within the United States has displayed a rising trend, increasing from 291 in 2020 to 322 in 2021, further growing to 360 in 2022, and reaching 377 in 2023.[6] This sector has demonstrated remarkable resilience in the face of the pandemic, and real estate, in general, stands as a robust asset. The real estate industry is inherently fluid, continually adjusting to prevailing trends. Hence, ownership of the real estate housing gaming enterprises provides these companies with some risk mitigation.
Channel analysis
In-person gaming serves as the cornerstone of the industry, complemented by the ascending presence of online gaming. Land-based casinos continue to experience gradual growth, whereas Sports Betting and iGaming are demonstrating more substantial and accelerated expansion. As of 2022, traditional brick-and-mortar casinos and retail sports betting contributed to 80.5 percent of the total gaming revenue. In contrast, the combined revenue generated from mobile sports betting and online casinos accounted for 19.5 percent.
Comparatively, the proportion of total gaming revenue in the United States originating from online platforms remains notably lower than prominent international markets. For instance, the U.K. commands a share of around 65%, while France and Germany hold approximately 30% and 28%, respectively.
However, at the state level, a more nuanced perspective emerges. In states offering both land-based and online gaming options, the combined online share of sports betting and iGaming averages at 40.7 percent. [5]
Reasons for Visiting a casino
| Group | 2014 | 2022 |
|---|---|---|
| Primarly to gamble (A) | ~50% | ~50% |
| Primarily to make use of non-gambling entertainment (B) | ~47% | ~32% |
| To gamble and make use of non-gambling entertainment (C) | ~4% | ~18% |
A survey conducted by the American Gaming Association investigated the motivations of casino-goers for their visits.[5] It's important to note that the provided percentages are approximate. The shift from group (B) to (C) suggests that even individuals who don't primarily engage in gambling but visit to access other amenities might ultimately participate in gambling activities.
Vertical analysis
| Vertical | GGR ($bn) | % Change from 2021 |
|---|---|---|
| Slot | 34.19 | +5.1% |
| Table Game (Casino) | 10.00 | +13.9% |
| Sports Betting | 7.50 | +72.7% |
| iGaming | 5.02 | +35.2% |
| Total | 60.42 | +13.9% |
In 2022, all three primary segments — casino slots and table games, sports betting, and iGaming — achieved their respective record-breaking revenue figures. Casino slots and table games collectively contributed an impressive $47.83 billion (among some others), constituting 79.3 percent of the entire commercial gaming revenue. Simultaneously, sports betting generated $7.50 billion (12.4% of total), while iGaming amassed a total of $5.02 billion (8.3% of total).[5] The large growth in Sports betting is likely attributed to the FIFA World Cup 2022 - a global sporting event.
Live casino serves as a distinct category within the domain of iGaming/Online Gaming, with its primary objective being the faithful emulation of the in-person casino experience. Its fundamental approach involves real-time video feeds featuring live dealers who actively shuffle and distribute cards. This setup enables players to engage in each round, fostering an interactive atmosphere akin to physical casinos.
The prominence of Live Casino experienced a significant surge during the pandemic, as it emerged as the sole viable alternative for those seeking the casino ambiance. Since then, its trajectory has remained steadfast, illustrated by the substantial growth of Evolution Gaming, a leading global provider of live casino solutions, which has seen substantial growth in its revenues. Live Casino continues to command widespread attention. Industry giants like Playtech are intensifying their Live Casino offerings, gaming providers are establishing additional live casino studios, and talk of how the metaverse may revolutionize the market. Ady Totah, CEO of LuckStreak, a live casino provider, believes the audience prefers a casual setting rather than a sensory-overwhelming experience that Virtual reality can offer. Further to this, other Live casino providers are looking to offer something new: combining gameshows, robot arms and different camera angles - their goal to to create a different experience to the casino experience in a typical land-based casino.[7]
Market: Key takeaways
- Despite challenging economic conditions due to COVID-19 lockdowns and an impending recession, the gambling market is experiencing growth.
- The US holds a leading position in the land-based casino segment in terms of revenue, and many of the largest global casino operators are based in the US.
- Online gambling growth is a primary driver of the industry's expansion. Europe currently holds the largest market share, but the US exhibits the highest growth rates in revenue and user numbers. It is anticipated that the US will surpass Europe's total user count and align its user base with the rest of the world (excluding Europe).
- The growth of online gambling, including Live Casino, is not expected to negatively impact the land-based casino market. Instead, it serves as a catalyst. Online platforms attract casual and non-gamblers who might find traditional casinos intimidating. The availability of free demo versions online, where individuals can engage with simulated money, is a draw for early-stage gamblers.
- Casinos are transitioning into comprehensive entertainment centers, offering diverse amenities and services. This appeals to non-gamblers who may not be interested in gambling itself but are enticed by the immersive gambling environment. (See 'Reasons for visiting a casino')
- GLPI owns properties leased by gaming operators, exposing them to the gambling industry's performance. However, due to the adaptability of real estate to market shifts, potential downsides resulting from significant changes in the gambling sector could be mitigated. If necessary, GLPI's properties could be repurposed to target alternative markets, such as the industrial sector.
Legal, Geopolitical and Regulations
Regional
The record year for land-based casino gaming was fueled by the introduction of markets in Nebraska and Virginia, alongside a nationwide rebound in visitation after a two-year pandemic-related decline. In 2022, approximately 84 million American adults, accounting for 34 percent of the adult population, visited a casino, indicating a 6% rise compared to 2020 and 2021. However, this figure remained 10% lower than the peak observed in 2019. Mississippi, South Dakota, Michigan, and Kansas saw a negative YOY change in traditional casino gaming revenue when compared to 2021. New Mexico (+22%), Rhode Island (+15%) and Illinois (+13%) were the top 3 states in % change.
Lease agreements, length
Economic Conditions & Investor Sentiment
Credit
Financials
Balance Sheet
| June 30, 2023 | December 31, 2022 | |
|---|---|---|
| Assets | ||
| Real estate investments, net | $8,238,398 | $7,707,935 |
| Investment in leases, financing receivables, net | $1,891,789 | $1,903,195 |
| Right-of-use assets and land rights, net | $844,627 | $834,067 |
| Cash and cash equivalents | $9,450 | $239,083 |
| Other assets | $47,673 | $246,106 |
| Total assets | $11,031,937 | $10,930,386 |
| Liabilities | ||
| Accounts payable and accrued expenses | $5,084 | $6,561 |
| Accrued interest | $80,651 | $82,297 |
| Accrued salaries and wages | $3,795 | $6,742 |
| Operating lease liabilities | $199,060 | $181,965 |
| Financing lease liabilities | $54,017 | $53,792 |
| Long-term debt, net of unamortized debt issuance costs, bond premiums and original issuance discounts | $6,248,838 | $6,128,468 |
| Deferred rental revenue | $307,271 | $324,774 |
| Other liabilities | $30,347 | $27,691 |
| Total liabilities | $6,929,063 | $6,812,290 |
| Equity | ||
| Preferred stock ($.01 par value, 50,000,000 shares authorized, no shares issued or outstanding at June 30, 2023 and December 31, 2022) | — | — |
| Common stock ($.01 par value, 500,000,000 shares authorized, 262,640,178 and 260,727,030 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively) | $2,626 | $2,607 |
| Additional paid-in capital | $5,651,612 | $5,573,567 |
| Accumulated deficit | ($1,903,326) | ($1,798,216) |
| Total equity attributable to Gaming and Leisure Properties | $3,750,912 | $3,777,958 |
| Noncontrolling interests in GLPI's Operating Partnership (7,653,326 units and 7,366,683 units outstanding at June 30, 2023 and December 31, 2022, respectively) | $351,962 | $340,138 |
| Total equity | $4,102,874 | $4,118,096 |
| Total liabilities and equity | $11,031,937 | $10,930,386 |
Income Statement
Income Statement from 2023 Q2 report.
This table compares:
- Q2 2023 vs Q2 2022 (Three Months Ended)
- Half-year (HY) 2023 VS HY 2022 (Six Months Ended)
| Three Months Ended June 30 (Q2) | Six Months Ended June 30 (HY) | |||
|---|---|---|---|---|
| Revenues | 2023 | 2022 | 2023 | 2022 |
| Rental income | $319,236 | $289,574 | $637,204 | $577,351 |
| Interest income | $37,353 | $36,939 | $74,599 | $64,128 |
| Total income from real estate | $356,589 | $326,513 | $711,803 | $641,479 |
| Operating expenses | ||||
| Land rights and ground lease expense | $11,892 | $11,720 | $23,906 | $25,424 |
| General and administrative | $12,639 | $12,212 | $29,089 | $27,944 |
| Gains from dispositions | $— | $— | $— | ($51) |
| Impairment charge on land | $— | $3,298 | $— | $3,298 |
| Depreciation | $65,731 | $59,964 | $131,285 | $119,093 |
| Provision for credit losses, net | $28,052 | $2,222 | $22,399 | $28,878 |
| Total operating expenses | $118,314 | $89,416 | $206,679 | $204,586 |
| Income from operations | $238,275 | $237,097 | $505,124 | $436,893 |
| Other income (expenses) | ||||
| Interest expense | ($79,371) | ($78,257) | ($160,731) | ($156,179) |
| Interest income | $1,273 | $102 | $5,528 | $124 |
| Losses on debt extinguishment | $— | ($2,189) | ($556) | ($2,189) |
| Total other expenses | ($78,098) | ($80,344) | ($155,759) | ($158,244) |
| Income before income taxes | $160,177 | $156,753 | $349,365 | $278,649 |
| Income tax expense | $40 | $966 | $558 | $1,170 |
| Net income | $160,137 | $155,787 | $348,807 | $277,479 |
| Net income attributable to non-controlling interest in the Operating Partnership | ($4,507) | ($4,473) | ($9,826) | ($6,897) |
| Net income attributable to common shareholders | $155,630 | $151,314 | $338,981 | $270,582 |
| Earnings per common share: | ||||
| Basic earnings attributable to common shareholders | $0.59 | $0.61 | $1.29 | $1.09 |
| Diluted earnings attributable to common shareholders | $0.59 | $0.61 | $1.29 | $1.09 |
Statement of Cash flows
Stock performance history
Nasdaq: https://www.nasdaq.com/market-activity/stocks/glpi GLPI: https://www.nasdaq.com/market-activity/stocks/glpi
| Year | Stock Price ($) |
|---|---|
| 2018 | 32.32 |
| 2019 | 43.05 |
| 2020 | 42.4 |
| 2021 | 48.66 |
| 2022 | 52.09 |
Dividends history
GLPI's dividends history are as follows:[8]
| Declared | Ex-Date | Record | Payable | Amount | Type |
|---|---|---|---|---|---|
| Jun 01, 2023 | Jun 15, 2023 | Jun 16, 2023 | Jun 30, 2023 | 0.72 | U.S. Currency |
| Feb 22, 2023 | Mar 09, 2023 | Mar 10, 2023 | Mar 24, 2023 | 0.25 | Extra, special, participating or arrears |
| Feb 22, 2023 | Mar 09, 2023 | Mar 10, 2023 | Mar 24, 2023 | 0.72 | U.S. Currency |
| Total dividends in 2023: | 1.69 | ||||
| Nov 23, 2022 | Dec 08, 2022 | Dec 09, 2022 | Dec 23, 2022 | 0.705 | U.S. Currency |
| Aug 31, 2022 | Sep 15, 2022 | Sep 16, 2022 | Sep 30, 2022 | 0.705 | U.S. Currency |
| May 10, 2022 | Jun 09, 2022 | Jun 10, 2022 | Jun 24, 2022 | 0.705 | U.S. Currency |
| Feb 24, 2022 | Mar 10, 2022 | Mar 11, 2022 | Mar 25, 2022 | 0.69 | U.S. Currency |
| Total dividends in 2022: | 2.805 | ||||
| Dec 17, 2021 | Dec 23, 2021 | Dec 27, 2021 | Jan 07, 2022 | 0.24 | Extra, special, participating or arrears |
| Nov 30, 2021 | Dec 08, 2021 | Dec 09, 2021 | Dec 23, 2021 | 0.67 | U.S. Currency |
| Aug 27, 2021 | Sep 09, 2021 | Sep 10, 2021 | Sep 24, 2021 | 0.67 | U.S. Currency |
| May 20, 2021 | Jun 10, 2021 | Jun 11, 2021 | Jun 25, 2021 | 0.67 | U.S. Currency |
| Feb 23, 2021 | Mar 08, 2021 | Mar 09, 2021 | Mar 23, 2021 | 0.65 | U.S. Currency |
| Total dividends in 2021: | 2.90 | ||||
| Nov 05, 2020 | Nov 13, 2020 | Nov 16, 2020 | Dec 24, 2020 | 0.60 | U.S. Currency |
| Aug 06, 2020 | Aug 14, 2020 | Aug 17, 2020 | Sep 25, 2020 | 0.60 | U.S. Currency |
| Apr 29, 2020 | May 12, 2020 | May 13, 2020 | Jun 26, 2020 | 0.60 | U.S. Currency |
| Feb 21, 2020 | Mar 05, 2020 | Mar 06, 2020 | Mar 20, 2020 | 0.70 | U.S. Currency |
| Total dividends in 2020: | 2.50 | ||||
| Nov 27, 2019 | Dec 12, 2019 | Dec 13, 2019 | Dec 27, 2019 | 0.70 | U.S. Currency |
| Aug 20, 2019 | Sep 05, 2019 | Sep 06, 2019 | Sep 20, 2019 | 0.68 | U.S. Currency |
| May 28, 2019 | Jun 13, 2019 | Jun 14, 2019 | Jun 28, 2019 | 0.68 | U.S. Currency |
| Feb 19, 2019 | Mar 07, 2019 | Mar 08, 2019 | Mar 22, 2019 | 0.68 | U.S. Currency |
| Total dividends in 2019: | 2.74 | ||||
| Oct 12, 2018 | Dec 13, 2018 | Dec 14, 2018 | Dec 28, 2018 | 0.68 | U.S. Currency |
| Jul 31, 2018 | Sep 06, 2018 | Sep 07, 2018 | Sep 21, 2018 | 0.63 | U.S. Currency |
| Apr 24, 2018 | Jun 14, 2018 | Jun 15, 2018 | Jun 29, 2018 | 0.63 | U.S. Currency |
| Feb 01, 2018 | Mar 08, 2018 | Mar 09, 2018 | Mar 23, 2018 | 0.63 | U.S. Currency |
| Total dividends in 2018: | 2.57 | ||||
| Oct 19, 2017 | Nov 30, 2017 | Dec 01, 2017 | Dec 15, 2017 | 0.63 | U.S. Currency |
| Jul 25, 2017 | Sep 07, 2017 | Sep 08, 2017 | Sep 22, 2017 | 0.63 | U.S. Currency |
| Apr 25, 2017 | Jun 14, 2017 | Jun 16, 2017 | Jun 30, 2017 | 0.62 | U.S. Currency |
| Feb 01, 2017 | Mar 09, 2017 | Mar 13, 2017 | Mar 24, 2017 | 0.62 | U.S. Currency |
| Total dividends in 2017: | 2.50 | ||||
| Nov 04, 2016 | Dec 01, 2016 | Dec 05, 2016 | Dec 16, 2016 | 0.60 | U.S. Currency |
| Aug 03, 2016 | Sep 08, 2016 | Sep 12, 2016 | Sep 23, 2016 | 0.60 | U.S. Currency |
| Apr 25, 2016 | May 31, 2016 | Jun 02, 2016 | Jun 17, 2016 | 0.56 | U.S. Currency |
| Jan 29, 2016 | Feb 18, 2016 | Feb 22, 2016 | Mar 25, 2016 | 0.56 | U.S. Currency |
| Total dividends in 2016: | 2.32 | ||||
| Oct 28, 2015 | Nov 27, 2015 | Dec 01, 2015 | Dec 18, 2015 | 0.545 | U.S. Currency |
| Jul 30, 2015 | Sep 10, 2015 | Sep 14, 2015 | Sep 25, 2015 | 0.545 | U.S. Currency |
| May 04, 2015 | Jun 09, 2015 | Jun 11, 2015 | Jun 26, 2015 | 0.545 | U.S. Currency |
| Feb 03, 2015 | Mar 06, 2015 | Mar 10, 2015 | Mar 27, 2015 | 0.545 | U.S. Currency |
| Total dividends in 2015: | 2.18 | ||||
| Nov 19, 2014 | Nov 28, 2014 | Dec 02, 2014 | Dec 19, 2014 | 0.52 | U.S. Currency |
| Nov 19, 2014 | Nov 28, 2014 | Dec 02, 2014 | Dec 19, 2014 | 0.40 | Extra, special, participating or arrears |
| Sep 03, 2014 | Sep 11, 2014 | Sep 15, 2014 | Sep 26, 2014 | 0.52 | U.S. Currency |
| May 30, 2014 | Jun 10, 2014 | Jun 12, 2014 | Jun 27, 2014 | 0.52 | U.S. Currency |
| Feb 19, 2014 | Mar 05, 2014 | Mar 07, 2014 | Mar 28, 2014 | 0.52 | U.S. Currency |
| Jan 03, 2014 | Jan 09, 2014 | Jan 13, 2014 | Feb 18, 2014 | 11.84 | Extra, special, participating or arrears |
| Total dividends in 2014: | 14.32 |
Competitor Financials (VICI)
References
- ↑ 1.0 1.1 1.2 Form 10-K: Annual Report (Report). Gaming and Leisure Properties. February 19, 2021. pp. 61–62 – via EDGAR.
- ↑ Form 10-K: Annual Report (Report). Gaming and Leisure Properties. February 19, 2021. p. 21 – via EDGAR.
- ↑ The Business Research Company. (January, 2023). Global Market Opportunities & Strategies Gambling. Retrieved from https://www.thebusinessresearchcompany.com/report/gambling-market#:~:text=Gambling%20Market%20Size,at%20a%20CAGR%20of%2011.3%25.
- ↑ Statista. (January 25, 2022). Leading selected casino companies worldwide in 2020, by revenue (in billion U.S. dollars) [Graph]. In Statista. Retrieved from https://www.statista.com/statistics/257531/leading-casino-companies-worldwide-by-revenue/
- ↑ 5.0 5.1 5.2 5.3 American Gaming Association. (February, 2023) Commercial Gaming Revenue Tracker CY 2022. Retrieved from https://www.americangaming.org/wp-content/uploads/2023/02/CGRT_CY_2022_Report.pdf
- ↑ IBISWorld (January 2023) Casino Hotels in the US - Number of Businesses 2003-2029. Retrieved from: https://www.ibisworld.com/industry-statistics/number-of-businesses/casino-hotels-united-states/
- ↑ INTERGAMINGI (May 2023) Live and Immersive. Retrieved from: https://www.intergameonline.com/igaming/features/live-and-immersive
- ↑ Gaming & Leisure Properties (2023) Stock Information, Dividends Splits. Retrieved from: https://investors.glpropinc.com/stock-information/dividends-splits