New Greektown Casino operator wants to add sports betting

Breana Noble
The Detroit News

The future operator of Greektown Casino-Hotel says it wants to pursue sports betting in Michigan.

Quicken Loans founder Dan Gilbert is selling the casino to Wyomissing, Pennsylvania-based Penn National Gaming Inc. and a New York real estate investment trust for $1 billion in a deal subject to state approval announced Wednesday.

The acquisition of Greektown Casino by Penn National could make it easier to introduce sports betting to the casino, if Michigan legalizes it. Gilbert owns the Cleveland Cavaliers NBA franchise, which could have complicated the matter.

More:Howes: Gilbert's casino sale fuels Tigers talk — or not

The U.S. Supreme Court ruled in May that the federal government's ban on sports gambling in most states was unconstitutional. Pennsylvania this month issued its first sports betting license, joining six other states that have taken the next step to legalize it.

Penn National Gaming, the new operator of Greektown Casino, has entered into decades-long agreements with four internet gaming operators to bring sports gambling to its 41 locations in 19 states; two potentially could operate in Michigan.

In June, the Michigan House passed a bill that would allow Detroit casinos to offer online gaming, though not sports gambling, as soon as next year. The bill would regulate online sports-betting, subject to the approval of the Michigan Gaming Control Board.

Eric Schippers, senior vice president of public affairs for Penn National, said the company is on board to bring a sports playbook to one of America's biggest sports towns.

"We would love the opportunity to offer sports betting there," he told The News on Wednesday. "That is something we are going to be exploring legislatively. MGM Grand Detroit has been working hard to bring about sports betting in Michigan. We want to join the team and take action on it."

Penn National owns 40 casinos across 18 jurisdictions. Its casinos in Mississippi, Nevada and West Virginia already have sports betting, and it is coming to a casino in Pennsylvania next week.

Penn National says it will pay $300 million to operate Greektown Casino. New York-based VICI Properties Inc. will pay $700 million to own the property. The companies expect to close the deal in the middle of 2019.

Penn National's shares closed Wednesday up nearly 7.9 percent to $21.32 on the news. The company's stock is down nearly 22 percent over the past year.

In a statement, Matt Cullen, CEO of Jack Entertainment, said Penn National was the ideal steward to grow Greektown Casino because of its strong culture and leadership.

The casino operator says it is planning no significant changes to the 1,800 workers employed and will honor all of the collective bargaining agreements in place. Several of the company's other locations are unionized.

"We are pleased to see that the existing collective bargaining agreement will be honored under the new ownership," Alexis Wiley, Mayor Mike Duggan's chief of staff, said in a statement. "We will review the other details of the agreement as they become available over the coming weeks and months."

Penn National also does not have plans for any operational changes, as well, though the acquisition would provide guests access to the company's player rewards to earn points and redeem them at all of its locations.

The company, however, does carry a history of fines and violations in neighboring states. Earlier this month, the Illinois Gaming Board approved disciplinary fines of $1.75 million to Penn National and two of its casinos.

According to the board, the company's marketing department had written purchasing orders outside of the normal bidding process to a company that gave gifts to casino executives that weren't included on the gift logs. Additionally, the board said Hollywood Casino in Aurora, Illinois, had hired temporary workers from an unapproved vendor. Some of the workers had felony convictions.

The board said those violations followed several others, though the company said it recently replaced management at its Aurora location.

In September 2017, the Ohio Casino Control Commission also fined Penn's Hollywood Casino in Columbus $10,000 because commission staff discovered slot machines that were unlisted, had unapproved software and were placed into play without being verified and sealed by regulatory staff. The commission has reported violations in three other instances at Hollywood Casinos in Columbus and Toledo totaling $109,000 since 2013.

Jessica Franks, communications director at the commission, said the regulatory body has had 15 instances of violations across all of the state's casinos.

"We have a good working relationship with all of our working operations," Franks said. "What we want is for them to be in compliance. (Violations) are very few or far between. It is a rare occurrence."

Mary Kay Bean, spokeswoman for the Michigan Gaming Control Board, said the board has not yet received the applications for transferring ownership of the Greektown Casino. The board licenses both commercial casino gaming entities and the key individuals associated with them.

Schippers said the company is committed to being good corporate citizens and plans to uphold Greektown's development agreement made between Gilbert and the city. The agreement prioritizes local hiring and procurement, assisting with enhancing the community, supporting tourist attraction and providing training opportunities.

"We very much look forward to working with the city," Schippers said, "and being a part of the ongoing renaissance that’s occurring there."