Hard Rock International and VICI Properties completed this past Friday the purchase of JACK Cincinnati Casino in a $745 million deal.
Simultaneously with closing the transaction, the two companies entered into a triple-net lease agreement that will see Hard Rock lease the casino complex for $42.75 million a year for an initial 15-year term with the option for four five-year extensions.
JACK Cincinnati is one of Ohio’s premium gambling venues. The property features a 100,000-square-foot casino with 1,800 slot machines and 100 table games, 33,000 square feet of meeting space and six dining facilities. It opened doors in 2013 as Horseshoe Cincinnati. In 2016, the casino rebranded as JACK Cincinnati Casino following the rebrand of its now former owner as JACK Entertainment.
JACK Cincinnati employed around 1,700 people when it opened doors six years ago. Its workforce currently includes about 1,000 employees. The property recorded average monthly gaming revenue of about $17 million in 2018.
Terms of the Deal
News about JACK Entertainment’s decision to sell JACK Cincinnati first emerged this past April. Under the terms of the deal, VICI, the real estate investment trust that spun off from Caesars Entertainment Corp. in the fall of 2017, agreed to pay $558 million in cash for a 100% interest in a subsidiary of JACK Cincinnati Casino LLC that owns the land and real estate assets of the Cincinnati casino. Florida-based gaming and hospitality company Hard Rock International paid another $187 million for the operating assets of the gambling venue.
As mentioned earlier, VICI and Hard Rock entered into a multi-year leasing agreement upon the completion of the purchase.
The deal’s closure means that the casino can now be rebranded as Hard Rock Casino Cincinnati. The new owners of the property previously said that they will add new facilities to the existing ones, but it is yet to be seen what the expansion might include.
Hard Rock has also agreed to purchase the Turfway Park racetrack in Florence, Kentucky from JACK Entertainment. That transaction is expected to close in the coming months, pending regulatory approval.
Management’s Comments
Of the completed sale of JACK Cincinnati, JACK Entertainment President and Chief Operating Officer Mark Dunkeson said that they are pleased to welcome Hard Rock to the Queen City and that “after ten years and hundreds of millions of dollars of investment developing JACK Cincinnati Casino from the ground up, we are confident that the property’s success will continue into the future as Hard Rock International takes it to the next level of growth.”
JACK Entertainment said that it will be working closely with Hard Rock to ensure a smooth transition for staff and guests of the property.
News about the completion of the JACK Cincinnati deal arrived just days after the property’s now former owner clinched two important partnerships that would enable it expand into the sports betting and iGaming verticals, “should enabling legislation come to fruition” in Ohio.
JACK Entertainment tapped this past week sports betting technology provider Kambi as its sports betting partner and online gaming and sports betting solutions supplier GAN as its sports betting and online casino partner.
After the sale of JACK Cincinnati, JACK Entertainment now operates JACK Cleveland Casino in Ohio.
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