A judge is being asked by a labor union that represents workers at the Ameristar Casino located in East Chicago to review the Indiana Gaming Commission’s approval last month of a plan by Pinnacle Entertainment to sell its gambling boat to a real estate investment trust (REIT) and then through a subsidiary lease it back.
In a unanimous decision on Wednesday, March 23, the Missouri Gaming Commission voted 5-0 to allow the transfer of Pinnacle Entertainment’s casino properties in Missouri to Gaming Leisure Properties Inc. (GLPI).
In a petition for review filed Monday in Lake County Circuit Court, Unite Here Local 1, which represents over 15,000 hospitality workers in northwestern Indiana and Chicago, contends that the Pinnacle’s sale of the boat to GLPI would be in violation of a state law that limits an entity’s ownership of casinos to a maximum of two, according to the Associated Press.
The Hollywood Casino in Lawrenceburg, Indiana is owned by GLPI, and the company’s acquisition of real estate at the Belterra Casino in Florence, Indiana has also been approved. Because GLPI doesn’t operate the casinos on any of its Indiana properties, the Gaming Commission found that the sale is not in violation of Indiana’s two-casino maximum.
The court is being asked by Unite Here Local 1 to either issue a preliminary injunction or a stay of the commission ruling that allows the sale of the boat. To date, a hearing date has yet to be scheduled on the petition by the union. It is the union’s contention that the sale would harm its members because the lease payments would mean that there would be less money available for benefits and better wages and could also lead to a decrease in jobs. The plan by Pinnacle calls for the casino license for its gambling boat to be transferred to its subsidiary, PNK Entertainment Inc.
Meanwhile, on April 18, the Louisiana Gaming Control Board voted unanimously to approve the sale of Pinnacle properties, L’Auberge Baton Rouge, L’Auberge Casino Resort in Lake Charles, Boomtown Casino Hotel in New Orleans and Boomtown Casino Hotel in Bossier City to GLPI. The board’s approval is one of the last steps required before the transaction can be finalized.
Pinnacle confirmed that it was in discussions with GLPI in a press conference back in May, but had attempted to purchase real estate from Pinnacle for many months prior to that. Pinnacle’s management and board of directors want to maximize the value of the company shares to satisfy shareholders. Then in July, Pinnacle announced the deal to sell 15 of its casino properties to GLPI and then lease them back in a ten-year deal, with five-year renewals for an initial annual rent of $377 million. GLPI said that including debt, the deal is worth about $4.75 billion.