Casino News

Century Casinos Sells Four Locations to VICI Properties

Century Casinos has now reported that it has struck a definitive contract for VICI Properties to acquire the real estate assets of four properties in Alberta. These four sites are Century Casino & Hotel Edmonton, Century Casino St. Albert, Century Mile Racetrack and Casino, and Century Downs Racetrack and Casino for an aggregate purchase of CA$221.7 million in cash.

As a gambling entertainment company, Century Casinos owns and operates numerous gaming properties across Alberta as well as in select states in the US. Currently, the holds a 75% ownership interest in Century Downs Racetrack and Casino in Calgary, Alberta. It has also had an agreement to acquire 100% of Rocky Gap Casino Resortsโ€™ operations in Maryland, US.

VICI Properties Expands in Alberta

According to the terms of the agreement, VICI Properties will now acquire the four casino locations for an average price of CA$221.7 million as per the exchange rate of May 16, 2023. Via the deal, CA$192.3 million will be paid to subsidiaries of Century Casinos and around CA$29.4 million to acquire the fee simple real estate interest in Century Downs.

In addition to that closing of the transaction, the Century portfolio in Canada will be added to the triple-net master lease agreement between subsidiaries of VICI and a subsidiary of Century and annual rent will jump by CA$17.3 million. Representing an implied acquisition capitalization rate of 7.8%. Property-level rent coverage ratio under Master Lease is expected to be approximately 2.0x.

Moreover, the term of the Master Lease will be expanded that after the finalization of the transaction, the leaves will have a full 15-year initial base lease term, with four 5-year renewal options. Meanwhile, the companyโ€™s obligations under Master Lease will continue to be guaranteed by Century Casinos.

It should be also explained that the agreement is still subject to customary regulatory approvals and closing conditions and is projected to be completed in the second half of 2023. Also, Stifel acted as the exclusive financial advisor to the company, and Faegre Drinker Biddle & Reath LLP and Field LLP acted as legal counsel to the operator to aid the agreement.

At the start of 2023, VICI Properties inked another purchase agreement to expand its operations in the Province of Alberta. In January, the corporation announced the purchase of four of Pure Canadian Gaming Corporationโ€™s properties. These four casinos were Pure Casino Edmonton, Pure Casino Yellowhead, Pure Casino Calgary, and Pure Casino Lethbridge.

Changes to the Local Gambling Industry

Recently, the Province of Alberta announced that it will be increasing VLT capacity, as a way of helping airport authorities found themselves in financial trouble. Now the cap has been upped from 6,000 to 6,098. The change was introduced at the end of last year and it was requested by the Edmonton International Airport.

Source: โ€œCentury Casinos, Inc. Announces Sale-Leaseback of Four Properties in Alberta, Canadaโ€ PR Newswire, May 17, 2023