In the first move of what has been reported as a plan to divest of his casino interests, Dan Gilbert’s Jack Entertainment LLC announced plans to sell its Greektown Casino-Hotel for $1 billion cash.
Under the terms of the agreements, Penn National will acquire the operating assets of Greektown for approximately $300 million, and VICI Properties will acquire the land and real estate assets of Greektown, for approximately $700.0 million.
A release from the company said Dan Gilbert and his family of companies are targeting the capital proceeds from the sale for investment in Detroit real estate and business development.
In September it was widely reported the Cleveland Cavaliers owner was looking to exit the casino business. No plans have been announced regarding Gilbert’s properties in Cleveland and Cincinnati.
“JACK Entertainment is continuing a strategic assessment for its remaining gaming properties,” the release stated.
Gilbert has a working relationship of sorts with Penn National having partnered with the parent company of the Hollywood Casinos to get a referendum passed in Ohio in 2009 that cleared the way for four casinos in the state with each owning two.
The transaction requires regulatory approval, both at the federal and state levels.
“Our purchase of Greektown Casino-Hotel five and a half years ago, soon after its bankruptcy, allowed us to work with the great team at the property to create a winning culture and a vibrant business,” said Dan Gilbert, Chairman of JACK Entertainment and Founder and Chairman of Rock Ventures in the release.
“The sale to Penn National and VICI Properties will allow that strong trajectory to continue and provide additional capital to continue our strategic investments in our Detroit real estate and business initiatives.”
During the transition, the property will remain open for business as usual. At closing, Greektown team members will transition with compensation and benefit packages at least as favorable as they currently enjoy. All unions that currently represent Greektown team members will be recognized and all collective bargaining agreements will be assumed by Penn National at closing.