Boyd Gaming’s purchases this week brings their total number of casinos to 29.
Boyd Gaming announced it would buy the Valley Forge Casino Resort in Valley Forge, Pennsylvania this week. The sale of the Valley Forge Casino is expected to cost the Las Vegas gaming company $280.5 million.
The sale comes at a time when new gambling laws coming into effect should make a Pennsylvania casino license more lucrative. An October 2017 omnibus gambling bill enacted online gambling legalization and satellite casino expansion for the state.
By buying Valley Forge Casino, Boyd Gaming Corporation will acquire the right to launch an online casino and poker site in America’s 5th most populous state. Boyd Gaming will not be able to develop a land-based mini-casino elsewhere in the state, though the same law which created 10 satellite casinos for the 12-casino land-based casino industry loosened restrictions on gambling in Valley Force Casino.
“Grow and Diversify Our National Portfolio”
Keith Smith, Boyd Gaming CEO and president, said of the purchase, “The acquisition of Valley Forge Casino Resort is another excellent opportunity to further grow and diversify our nationwide portfolio.”
The company’s chief executive added, “With this acquisition, we will expand into the second-largest gaming state in the country, establishing a presence in a densely populated, high-traffic area just west of Philadelphia. 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.”
Pennsylvania passed a gambling expansion act which included satellite casinos, online gambling, truck stop slot machines, airport terminal tablet computer gambling, and online lottery sales. Pennsylvania is second only to Nevada in land-based casino revenues, as it collected $3.2 billion in 2016. That represented a 1% dropoff in gambling revenues, though.
Pennsylvania Budget Bill
The gambling expansion bill was not so much about propping up Pennsylvania’s clearly healthy gambling industry. Instead, it was about tapping that gambling industry for an extra $200 million-a-year in tax revenues. Pennsylvania’s government faced a $2.2 billion deficit after passing a $32 billion budget plan for 2017.
The current Valley Forge Casino has 40,000-square foot of gaming space, along with 600 slot machines, 50 table games, and nearly 500 hotel room. The recent gaming bill waived an entry fee for casino customers who did not buy a hotel room, so Valley Forge is a full casino that can welcome local visitors in an unrestricted fashion.
Valley Forge Sportsbook
If the US Supreme Court strikes down the PASPA federal sports gambling ban, it means the Valley Force Casino will be able to open a sportsbook. That would make the investment far more lucrative, though it is still up in the air whether the longstanding 46-state ban on land-based sports betting will be overturned. Boyd Gaming is betting that it does.
Boyd Gaming’s purchase of the Valley Forge Casino is part of a $575 million deal with Penn National Gaming and Pinnacle Gaming. In the deal, Boyd Gaming would buy 4 land-based casinos from Penn National Gaming. Meanwhile, Penn Nation is acquiring Pinnacle Gaming outright, in what is a $2.8 billion merger plan.
Boyd Gaming Company Profile
When the deal is completed, Boyd Gaming will own 29 different gaming properties in 10 different US states. Boyd Gaming generated $2.1 billion in revenue last year, which held steady from the 2015 numbers.
Founded in 1941 by Sam Boyd, the Boyd Gaming corporate portfolio includes Las Vegas area casinos like the Orleans Hotel and Gold Coast Casino, along with Sam’s Town Casino. While Boyd Gaming is not one of the big four Vegas Strip casino companies — MGM Grand, Las Vegas Sands, Caesars Entertainment, and Wynn Resorts — it is one of the largest Nevada casino companies which competes mainly off the Vegas Strip.
Keith Smith Press Release
In his press release announcing the sale, Keith Smith touted the company’s ability to service 10 million different new potential customers: “With the successful completion of our acquisitions…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.”
