An Indiana-based branch of a casino workers union is opposing the proposed sale of gambling venues owned by Pinnacle Entertainment Inc. to Gaming & Leisure Properties Inc. The casino employees are also planning to ask the Indiana Gaming Commission to turn down the plan, arguing that the deal would probably give the operator more rights than state laws actually allow.
Under the current Indiana gaming laws, a given operator is allowed to own no more than two casino properties within the state’s borders. Gaming & Leisure manages one gaming facility in Lawrenceburg and Pinnacle owns two such facilities – in Florence and East Chicago.
Las Vegas-headquartered gambling operator Pinnacle announced earlier this year plans to sell all 14 casinos it manages to Gaming & Leisure. The latter is to pay the amount of $4.8 billion for the transaction. Generally speaking, the deal is among those in which a given gambling operator sells its venues or converts them into REIT, in order to avoid paying federal income taxes and thus, trade the said venues at a higher stock market value.
The Indiana Gaming Commission is set to discuss the matter today at 1 pm local time. A spokesperson for the state gambling regulator could not be reached for comment.
Casino employees from the UNITE HERE hospitality workers union have been in a long-standing dispute with Pinnacle’s casino in East Chicago. According to union members, Gaming & Leisure was granted the so-called suppliers license, which is normally given to companies providing Indiana casinos with different services and goods. And its argument for its exemption from the limit for the operation of no more than two casinos could be based on the said license.
The union contended that licensing Gaming & Leisure was not just absurd but also created “a dangerous precedent” as other gambling operators have expressed interest in establishing their own REITs and leasing the venues they manage to third parties.
Gaming & Leisure, on the other hand, explained that under its deal with Pinnacle, the latter would remain the casino’s license holder. The company’s Chief Financial Officer Bill Clifford told media that UNITE HERE is trying to produce all kinds of obstacles without interpreting the applicable laws in the manner they should be interpreted.
Pinnacle revealed in October that the Mississippi gambling regulator has approved the transaction and is awaiting an approval from the remaining six states where the company provides its services.
