LAS VEGAS (KTNV) — Penn National Gaming said it is selling the Tropicana Las Vegas resort real estate assets to help mitigate the financial impact of the ongoing COVID-19 pandemic.
The gaming company also announced that it is selling the assets of the Tropicana and a new ground lease for a planned casino in Pennsylvania to Gaming & Leisure Properties for $337.5 million in rent credits.
"Today we announced an agreement with our principal landlord, Gaming & Leisure Properties, involving the sale of the Tropicana Las Vegas real estate assets (we will continue to operate the facility) and a new ground lease for our planned Category 4 casino in Morgantown, Pennsylvania, in exchange for $337.5 million in rent credits," said Jay Snowden, president and chief executive officer of Penn National.
Penn National said it would continue to pay its team members their full wages and benefits through March 31.
However, given the uncertainty about the duration of the pandemic and with no meaningful revenue for the foreseeable future, Penn National said it would also be implementing unpaid furloughs that would impact about 26,000 team members company-wide beginning April 1.
"We are committed to doing all we can to help our affected team members get through this," said Mr. Snowden. "To try to help ease some of the burden, we’re maintaining medical benefits through June 30, for those team members who are currently enrolled in our health plans.”
Penn National said it would also be taking the following additional short-term actions to reduce its cost structure during the property closures:
-Meaningful pay cuts for the CEO and remaining property and corporate leadership teams effective April 1 until such time as the company determines that its properties have substantially returned to normal operations.
-The board of directors has elected to forgo any of their cash compensation effective April 1 until such time as the company determines that its properties have substantially returned to normal operations.
-The majority of corporate team members will also be furloughed, and the company will be operating with a minimum, mission-critical staffing of less than 850 team members company-wide during the closures.
"With all of our 41 properties in 19 states temporarily shuttered, like many others in the gaming and hospitality sector, we are making difficult decisions to help preserve our liquidity and ensure a brighter future for our company's team members, customers, shareholders, and other key stakeholders," Snowden said.
The company is expected to provide a financial and operational update in connection with its first quarter 2020 earnings announcement on May 7.