Gaming and Leisure Properties Buys Tioga Downs Casino Resort Land for $175M
The land under Tioga Downs Casino Resort and racetrack in New York state has changed hands as of today. Gaming and Leisure Properties (GLPI), a real estate investment spin-off of Penn Entertainment, has announced the $175 million move into New York casinos real estate.
As is GLPI’s standard procedure, the deal will see the investment firm lease back the Tioga Downs Casino Resort property to previous owner American Racing & Entertainment.
American Racing will pay $14.5 million a year over 30 years to GLPI, while continuing to operate the casino and racetrack venture.
The move comes just a week after the announcement of a guilty plea from the arsonist who started a fire at a Tioga Downs barn in 2023 that killed 30 horses.
Tioga Downs, located in Nichols, N.Y., is a sprawling 162-acre casino and racetrack site. Its casino floor is 32,600-square-feet and hosts nearly 100 games, as well as New York retail sports betting via its FanDuel sportsbook.
“We are pleased to add Tioga Downs to our portfolio, and the new relationship with American Racing to our tenant roster. Tioga Downs further diversifies our portfolio, expanding it to 62 properties across 19 states with eight tenants,” said GLPI Chairman and CEO Peter Carlino in a press release.
Tioga Downs’ History
The Tioga Downs site first opened for New York horse race betting in 1976 as Tioga Park. The operation closed after just one year.
From then, the site — around 40 miles south of Ithaca near New York state’s border with Pennsylvania –hosted only private race meets for some 30 years. That was until early 2005, when New York state legalized video lottery terminals, or VLT slot-style games.
Local real estate developer Jeffrey Gural swiftly bought the Tioga Park site, renamed it Tioga Downs Casino Resort, and opened the new venue in 2006.
In 2016, the property underwent significant expansion. American Racing spent some $130 million to renovate and improve the resort after it was granted an upgraded Class III casino gaming license by the New York Gaming Commission.
Now, American Gaming is set to receive a significant injection of cash from selling its land to GLPI.
The venue could do with some good news. In late 2023, it saw a devastating arson attack that killed 30 horses, some of them dozen-time race winners.
The recent guilty plea from the fire-starter, who could face up to 15 years in prison, will be some consolation. But the effects of the November 2023 event will still be keenly felt by the community.
If the new funds can be used to rebuild and move on from the tragedy, it should benefit the casino, the horse racing community, the venue’s patrons, and its new landlord, GLPI.
According to the statement from GLPI, the ratio of Tioga Downs’ cash flow to the rent repayments will be sustainable. The deal includes annual escalation of the rent payments to encourage Tioga Downs to use the funds for growth.
“The initial annualized rent coverage ratio for the lease is expected to be over 2.3x. Rent associated with the lease is subject to a fixed 1.75% annual escalation beginning with the first anniversary, and a fixed annual escalation of 2.0% beginning in year fifteen of the lease and carrying forward through the balance of its term,” the announcement said.