Penn National cites casino expansion in neighboring Arkansas as the reason behind its decision to close one of its three Tunica properties
Casino operator Penn National Gaming announced Tuesday that it has decided to close Resorts Casino Tunica, one of its three properties in Tunica County, Mississippi. In a statement, the company cited growing competition in the region as the reason that has prompted its decision.
The casino is set to close doors permanently on June 30, pending approval from Mississippi’s competent regulatory bodies.
Penn National bought Resorts Casino Tunica – along with Bally’s Casino Tunica, now operating as 1st Jackpot, in March 2017 for $44 million. The company leases the two casinos from Gaming and Leisure Properties, Inc., the real estate investment trust that spun off from Penn National itself in November 2013. The Pennsylvania casino operator runs one more casino in Tunica – Hollywood Casino Tunica. The property is located adjacent to the soon-to-be-closed Resorts Casino.
Penn National’s move will mark the third casino closure in the region since 2014, leaving just six operational casinos.
Tunica County quickly became a booming casino market following the legalization of gambling in Mississippi in 1992. For quite some time, the county was the only casino gambling hub within hundreds of miles. In 2001, employment peaked to more than 13,000 gaming jobs, but it is now down to under 5,000.
In addition, gaming revenue has been on a downward spiral for more than 13 years. The legalization of sports betting in Mississippi last year has certainly boosted the industry, but it is yet to be seen whether that boost will be a long-term trend.
Competition from Neighboring Arkansas
Resorts Casino Tunica was already an underperforming property when it was acquired by Penn National two years ago. Commenting on their decision to shutter the casino, Al Britton, Senior Vice President of Regional Operations at the gaming company, said that with the acquisition of Resorts Casino as part of the two-property deal, they knew they “were acquiring an aging barge in need of significant capital improvements.”
The official went on to say that they did their best to keep the property afloat, “increased competition from recent gaming expansion in Arkansas continues to drive the property’s business volumes lower” and they were only “left with the difficult decision to close the business.”
Arkansas authorized Las Vegas-style casino gambling options at two racetracks and the development of two new full-scale casino resorts last November. The two racetracks – Southland Casino Racing in West Memphis and Oaklawn Racing Casino Resort in Hot Springs – recently added table games to their existing gaming machines.
The two racetracks had begun looking for casino staff way ahead of the opening of their full-blown casino floors on April 1 and Tunica in neighboring Mississippi was heavily targeted during their hiring initiatives.
Competition from Arkansas is set to increase even more when sports betting gets launched in the state. The legalization of the practice was part of a gambling expansion package approved by the state’s residents at last November’s ballot. It is still unknown when exactly Arkansas’ gambling venues will go live with sports wagering, but both Southland and Oaklawn have indicated that might happen sooner rather than later.
Resorts Casino currently employs just under 200 people. Mr. Britton said they will be seeking job opportunities for its employees at Penn National’s two other Tunica-based properties or at its other 39 casinos across the United States.
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