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Jonathan ZaunJanuary 05, 2018

Pennsylvania Adds Potential iGaming Player as Boyd Gaming Acquires Valley Forge Casino

As part of a series of acquisitions completed to close out 2017, Boyd Gaming Corporation has added Pennsylvania’s Valley Forge Casino Resort to the company’s burgeoning portfolio.

Per a press release issued on December 20, the Las Vegas-based Boyd Gaming acquired the casino from Valley Forge Convention Center Partners for a purchase price of $280.5 million. As a result, Boyd Gaming makes its first entrance into the lucrative Pennsylvania market – which has been built into the second-largest statewide commercial gambling industry in the United States, trailing only Nevada.

Valley Forge Casino Resort is located in King of Prussia, Pennsylvania, a small township 20 miles northwest of the Philadelphia metropolitan area. Despite its status as one of the state’s smaller casinos, Valley Forge is home to 600 slot machines and 50 table games spread throughout 35,000 square feet of gaming space.

With the addition, Boyd Gaming will operate 29 casino properties throughout 10 states. Of those, the majority are located in Las Vegas (Gold Coast, Orleans, Sam’s Town), with others in Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, and Ohio.

Boyd Gaming announced the terms of its Valley Forge deal just two days after another major acquisition moved forward. On December 18, the company agreed to pay $575 million to purchase four casino properties – Ameristar St. Charles (Missouri), Ameristar Kansas City (Missouri), Belterra Casino Resort (Indiana); and Belterra Park (Ohio) – from Penn National Gaming, which had only recently acquired them from Pinnacle Entertainment.

In a statement, Keith Smith – who serves as president and chief executive officer for Boyd Gaming – commented on the company’s casino shopping spree:

“With the successful completion of our acquisitions of Valley Forge and the Pinnacle assets, Boyd Gaming will gain direct access to four of the nation’s largest gaming markets – Philadelphia, St. Louis, Kansas City and Cincinnati – with a combined population of nearly 10 million adults.

We believe this expansion will help drive additional growth throughout our nationwide portfolio, as we market our destination properties to these new customers in the Midwest and Northeast.”

And while the Valley Forge deal is expected to close in the third quarter of 2018, Boyd Gaming is already being mentioned as a potential player in Pennsylvania’s newly legalized online gambling industry.

In late October of last year, Governor Tom Wolf signed a comprehensive gambling expansion bill into law – regulating online casinos, poker rooms, slot parlors, daily fantasy sports (DFS) platforms, and lottery ticket sales in the process. As a result, Pennsylvania became the fourth state to legalize online gambling, joining Nevada, New Jersey, and Delaware.

The new law stipulates that any of Pennsylvania’s 12 brick and mortar casinos, Valley Forge included, can apply for an online gaming license.

As the former part-owner of the Borgata casino in Atlantic City – the license-holder behind several successful online casinos and poker rooms in New Jersey – Boyd Gaming has prior experience in the iGaming industry. The company sold off its share of the Borgata in 2016, but as Smith alluded to in his public comments on the Valley Forge deal, Pennsylvania’s recently passed legislation provides another entry point to an online presence:

“The acquisition of Valley Forge Casino Resort is another excellent opportunity to further grow and diversify our nationwide portfolio.

And thanks to Pennsylvania’s recent passage of gaming expansion legislation, there are new opportunities to drive incremental growth at Valley Forge through the expansion of the property’s slot capacity and the introduction of new forms of gaming.”

And back in 2014, while praising the Borgata’s newly launched iGaming properties, Smith set Boyd Gaming apart from fellow brick and mortar casino operators by refuting the “cannibalization” argument routinely used against iGaming expansion:

“Online gaming is growing our database creating a long-term opportunity to market Borgata to an entirely new group of customers.”

The Pennsylvania Gaming Control Board is currently crafting a regulatory framework for iGaming in the state, and the industry is expected to launch in the second half of 2018.

 

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