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Shares of Golden Entertainment (NASDAQ: GDEN) rose on Friday after executives hinted they’re examining avenues for monetizing the casino operator’s real estate assets.

The comments were made on a conference following the company’s third-quarter earnings report. Acknowledging that Golden shares trade at deeply discounted multiples relative to peers, CEO Blake Sartini said the operator won’t sit idle on the strategic review front. It appears as though the company would be a more likely seller of assets than buyer because management noted compelling acquisitions opportunities are hard to come by in the current environment.

Protell did not comment on whether a sale of some or all of Golden’s property assets is imminent.

Golden Entertainment Real Estate Has Ample Value

Last month, speculation surfaced that Golden could consider monetizing some of its property holdings as an avenue for creating shareholder value. The earnings call was the first time executives publicly mentioned examination of its real estate.

On last night’s call, we believe GDEN was the most transparent it has ever been, and it does not intend to remain idle from a corporate strategic standpoint should shares remain near current valuation levels,” observed B. Riley analyst David Bain. “GDEN suggested a ‘high bar’ for acquisitions given its valuation and suggested it is in ‘active mode,’ reviewing the math around the value of its own real estate.”

The analyst noted that should Golden pursue an asset-light model and divest its land assets, the stock could “conservatively” be worth $42 a share — well above the roughly $32 area at which it trades today. By selling real estate, Golden would create long-term liabilities because it would have rent obligations via sale-leaseback deals, but it’d also significantly bolster its cash on hand position and that capital could be used for other value-generating opportunities.

In terms of property value, The Strat is the crown jewel in the Golden portfolio. Located near the Las Vegas Strip, that venue could fetch a significant percentage of Golden’s $871.25 million market capitalization in a potential sale.

Golden Stock Too Cheap

Bain argued that owing to Golden’s Nevada-only footprint and the state’s status as the marquee gaming market in the US, shares of the Arizona Charlie’s operator should not be so deeply discounted relative to peers.

The analyst said Nevada sets the stage for Golden to grow earnings before interest, taxes, depreciation, and amortization (EBITDA) and management is showing investors its sees value in the stock by repurchasing shares.

“NV assets that set the stage for intermediate to longer-term peer growth outperformance. Further, GDEN is poised for 15% q/q 4Q24E EBITDA growth and 7%+ y/y EBITDA growth next year (with upside),” he concluded. “Net leverage is ~2x (under-levered) and outside its over 3% dividend yield, GDEN increased its repurchase authorization $100M to $131M total, and made clear it will continue to buy back its stock.”

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Bally’s (NYSE: BALY) said it is selling its Asian interactive gaming business, which also operates in other markets, to a group comprised of executives from the to-be-divested entity.

Financial terms of the transaction weren’t disclosed, but Bally’s noted the sale will be “neutral” to its earnings before interest, taxes, depreciation, and amortization (EBITDA). The regional casino operator announced the deal in a Form 8-K filing with the Securities and Exchange Commission (SEC) earlier today.

The financial impact of the transaction is not expected to be material to Adjusted EBITDA or free cash flow of the Company,” said Bally’s in the regulatory document. “Going forward, the financial statements of the Company will only reflect licensing and royalty revenues received from the Buyer, which are expected to be lower than revenues under the current accounting treatment, but the profitability margins associated with those licensing revenues are expected to be higher as is customary in the gaming industry for IP license business models. The expected modest decline in Adjusted EBITDA and free cash flow resulting from the transaction are expected to be mitigated by cost actions to simplify Bally’s organizational structure and other cost reductions.”

The seller added the divestment of its Asian digital operations will allow it direct focus and resources to comparable operations in Europe and North America.

Bally’s Was Previously Bullish on Asia

When examining Bally’s online gaming business, the UK segment stands out as the clear leader with the aforementioned Asia unit being a laggard relative to the UK and North America.

“Outside the UK, our business in Asia was challenged in the quarter as we continue to work through several logistical and operational hurdles which directly impacted players,” he said on a conference call with analysts. “We believe the Asian Interactive market remains an attractive opportunity and we will continue to work to manage and grow our position in this important region.”

Rhode Island-based Bally’s delivers third-quarter results on Wednesday, Nov. 6. It’s possible that at that time, the company will provide more color on the Asia sale.

Asia Sale Could Help Renew Focus

Standard General — the hedge fund that’s Bally’s largest shareholder — is in the process of acquiring the casino operator. It’s not clear if the buyer prompted the sale of the Asian interactive business, but with that combination looming, now would be an opportune time to shed underperforming assets.

Additionally, the sale of the Asian business could pave the way for the seller to focus on important land-based projects, including construction of its permanent casino hotel in Chicago and a new integrated resort at the former site of the Tropicana on the Las Vegas Strip.

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Caesars Entertainment (NASDAQ: CZR) announced that it is selling the LINQ Promenade on the Las Vegas Strip for $275 million as part of the gaming company’s ongoing debt reduction efforts.

A joint partnership comprised of TPG Real Estate and Acadia Realty Trust investment management platform is acquiring the collection of retail and boutiques located near the Caesars-operated LINQ Hotel. That casino resort is not part of the transaction, which is slated to close in the current quarter.

The sale of the LINQ Promenade represents an accretive, non-core asset sale that will accelerate our debt reduction goals. I want to thank all the team members and the tenants of the LINQ Promenade for their partnership over the last 10 years and wish them continued success,” said Caesars CEO Tom Reeg in a statement.

LINQ Promenade occupants include O’Sheas Pub Las Vegas, I Love Sugar, Virgil’s Real BBQ, and the Tilted Kilt Pub, among others.

Caesars LINQ Sale Not Surprising

Last month, Casino.org was the first outlet to highlight an analyst report noting Caesars could opt to sell LINQ Promenade as part of its broader capital-raising efforts, indicating today’s news wasn’t surprising, particularly when accounting for the promenade’s status as a non-gaming asset.

In August, Caesars announced the sale of the intellectual property rights associated with the World Series of Poker (WSOP) to investment firm NSUS Group Inc. for $500 million. That transaction is now finalized with the seller announcing today that it received the initial $250 million payment from the buyer. The remainder is due in five years.

“Caesars retains the right from NSUS to host the flagship WSOP live tournament series at its Las Vegas casinos for the next 20 years and will receive a license from NSUS to continue operating its recently upgraded WSOP Online real-money poker business in Nevada, New Jersey, Michigan, and Pennsylvania for the foreseeable future but will otherwise be restricted from operating online peer-to-peer real-money poker operations for a specified period of time and subject to certain exceptions,” said Caesars in a separate statement.

LINQ Sale Matters to Debt-Cutting Plan

The influx of $250 million from the WSOP sale and another $275 million via the LINQ Promenade deal that should arrive before the end of the year means Caesars is bringing in more than $500 million via those two transactions.

That’s important because while the casino giant has been diligent in its debt reduction efforts, its total outstanding liabilities stood at $12.69 billion at the end of the third quarter, up from $12.43 billion at the end of last year.

That’s likely the result of the operator’s capital spending cycle, which is now at its end. Caesars had $802 million in cash on hand and $124 million in restricted cash at the end of September.

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Ahead of the team’s move to Las Vegas, the soon-to-be former Oakland Athletics (A’s) are rumored to be considering the sale of a minority interest in the franchise.

Unidentified sources familiar with the matter told The New York Post that owner John Fisher is looking to sell as much as 25% of the team for $500 million, implying the Major League Baseball (MLB) club is worth $2 billion. That’s significantly higher than the $1.2 billion Forbes said the team was worth before the start of the current season. At $1 billion, only the Miami Marlins were worth less than the A’s.

The A’s will play in Sacramento for the 2025 through 2027 seasons, with 2028 expected to be the club’s first in Las Vegas.

A’s Stake Sale Prices in Vegas Move

If the speculation that Fisher is trying to sell a 25% interest in the A’s at a $2 billion valuation proves accurate, he’s attempting to leverage the team’s move to Las Vegas. Essentially, he’s hoping potential investors will agree that the team’s value will increase upon moving to Sin City.

Raiders owner Mark Davis has capitalized on the team’s soaring value, recently selling a 5% stake to legendary quarterback Tom Brady at an estimated price tag of $335 million.

As The Post reported, potential sales of the Chicago White Sox and the Minnesota Twins — both of which could command up to $2 billion — could affect Fisher’s efforts to monetize a portion of the A’s.

$500M an Interesting Figure

It’s not yet clear if the following factors are related, but the dots are easy to connect. Fisher is reportedly attempting to sell up to $500 million worth of his baseball team, and that is the amount the club needs to finalize its $1.1 billion Las Vegas stadium financing obligation.

Gaming and Leisure Properties, which owns the property on which the stadium will reside, has committed to providing some financing for the project.

From where Bally’s will obtain capital to build a new integrated resort next to the stadium isn’t yet clear. The regional casino operator is focusing on completing its permanent Chicago venue, but has been consistent in its messaging regarding a desire to maintain a long-term presence in Las Vegas.

The post Oakland A’s Mulling Stake Sale at $2B Valuation appeared first on Casino.org.

Golden Entertainment (NASDAQ: GDEN) could consider selling and leasing back one of its casinos as an avenue for raising cash.

Deutsche Bank analyst Carlo Santarelli put forth that theory in a new report to clients, noting there’s “rising probability” that Golden engages in a sale-leaseback on one of its casinos. The analyst did not speculate as to which gaming venue Golden could consider selling. Currently, the Las Vegas-based gaming company owns all of the real estate on which its eight casino hotels reside. Three of those venues are located in Las Vegas with another trio in Pahrump, Nevada and two more in Laughlin.

Santarelli didn’t speculate on a timeline for such a deal materializing nor did he hypothesize as to what company could be Golden’s real estate partner on a sale-leaseback. The operator reports third-quarter earnings on Nov. 7 and it’s possible the rumor is addressed at that time.

Selling Casino Could Boost Golden Shares

Amid investor concern that persistent inflation and high interest rates are weighing on the lower end of Golden’s casino customer base and its tavern business, the stock has struggled mightily this year, shedding nearly 23% while the Russell 2000 Index is higher by 12.43%.

Of late, analysts’ earnings and revenue revisions on Golden have been largely bearish, adding pressure on the stock and potentially fanning the flames of speculation regarding a transaction that could renew the bull case.

We believe our updated forecasts account for what we expect to be relatively stable trends in the key segments, adjusted for seasonality, which include a moderation of same-store top-line declines as we move into the fourth quarter,” Santarelli observed. “That said, we acknowledge that the Golden story of late has been one of predominantly negative estimate revisions, which in our view has likely led to more speculation around strategic action.”

The analyst lowered his earnings forecast on Golden, but reiterated a “buy” rating on the stock. He added that the depressed valuation on the shares could increase the probability of the operator seeking a transaction that creates value for investors.

How Casino Sale Could Affect Golden

Without knowing the property Golden would sell, cap rates and tax implications, modeling for the financial impact to the operator is difficult, but Santarelli gave it a go. He said in a sale-leaseback, Golden would absorb $87 million in annual rent costs and have $130 million in cash, including proceeds from the deal, by the end of next year.

It can be argued that $87 million in rent assumes either The Strat is the venue Golden will sell or that the operator could engage in sale-leasebacks on multiple properties.

Golden could also consider finally making a decision on the Colorado Belle in Laughlin, which has been closed since 2020. Rumors abound regarding the fate of that property, but the operator hasn’t made any public announcements about its plans for it.

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Mergers and acquisitions activity in the North American sports betting industry has been brisk this year with operators making buys to add technology and exposure to new arenas.

At least one expert believes a similar cadence will play out in 2025 as online sportsbook companies look to bolster customer acquisition and retention tools and tech stacks while forging further into new growth frontiers, such as internet lottery. As one example of that theme, DraftKings (NASDAQ: DKNG) said in February it paid $750 million for lottery provider Jackpocket.

We expect betting operators to display a similar mix of M&A motivations in the next 12 months with interest in five key areas,” said Chris Grove, partner emeritus at Eilers & Krejcik Gaming (EKG), at the Global Gaming Expo (G2E) earlier this week. “We might see interest in customer relationship management tech and other back-office capabilities. Free-to-play games designed to feed acquisition funnels are another category to watch.”

He added that there’s unlikely to be much movement in 2025 in terms of sports betting/media combinations because prior deals haven’t delivered for buyers.

Parlays Could Drive Sports Betting M&A

The need for operators to deepen and improve their parlay offerings, particularly those of the same-game and in-game variety, could be another catalyst that drives 2025 consolidation.

“Anything that allows an operator to price better, especially for parlays, will be of interest. Despite the rash of recent acquisitions, there’s still plenty in the market (GiG, Huddle, Kambi, Kero, nVenue, Swish),” added Grove.

Grove also pointed out that iGaming could be fertile territory for acquisitions next year, but buyers are more apt to consider adding technology providers rather than purchasing direct rivals in the name of adding market share.

Compliance, Payments Could Also Spark M&A

Compliance and regulatory issues, including cybersecurity and geolocation, are facts of life for online sportsbook operators and pricey ones at that. Reduction of those costs could compel gaming companies to pursue related acquisitions, but EKG’s Grove noted “economics can be tricky.”

As for payments, operators would undoubtedly like to realize cost savings on that front and they could use consolidation to accomplish that objective, but that theme is likely further out than 2025.

“It’s a massive cost center and a critical part of the user experience, but it’s also a logistical and liability nightmare in the US,” concluded Grove. “FanDuel, for instance, spends 6% of NGR on payment costs. We believe the in-housing of some part of the payments stack — maybe even most of it — is all but inevitable, but we are bearish about any of that happening in the short term.”

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