Billionaire businessman Dan Gilbert is out of the Ohio casino
Expertise: Financial, Gaming Business, Mergers and Acquisitions
Billionaire businessman Dan Gilbert is out of the Ohio casino businesses. That’s after reportedly selling his JACK Entertainment to the company’s management team last month.
JACK Chairman Matthew Cullen confirmed to the Cleveland Jewish News (CJN) that the gaming company no longer has ties to Gilbert’s sprawling business empire. However, the enterprise’s headquarters were moved from Detroit to Cleveland, home of Gilbert’s Cavaliers NBA franchise.
The JACK management team, who have been with the company since its inception, remains in place and now owns the controlling interest of the company,” Cullen in said in a statement to CJN.
Financial terms of the transaction weren’t disclosed. It’s estimated that JACK Casino in downtown Cleveland and JACK Thistledown Racino in North Randall, Ohio combine for $400 million to $500 million in annual revenue.
There are 11 commercial gaming venues in the Buckeye State, and with JACK’s move there, it’s the only operator with Ohio casinos that’s based in the state.
Gilbert’s Gradual Casino Exit
Ohio voters approved casino gaming in 2009, and Gilbert was instrumental in opening the first gaming property in the state, Horseshoe Casino Cleveland. three years later in partnership with Caesars Entertainment.
JACK’s gaming roster eventually grew to six venues. But by 2018, Gilbert signaled a desire to exit the casino business. Sale partners included Churchill Downs and gaming real estate investment trust (REIT) VICI Properties. The Greektown Casino in Detroit was sold by JACK in late 2018 for $1 billion to VICI and Penn National Gaming, stoking speculation Gilbert was looking to divest his gaming assets to make a run at the Major League Baseball’s (MLB) Detroit Tigers.
Gilbert, worth an estimated $49.6 billion as of last August, is a Motor City native. His most well-known enterprises are Quicken Loans and the NBA’s Cleveland Cavaliers.
Ohio Casinos Slumping
Currently, Buckeye State casinos are open following a multi-month closure in 2020 because of the coronavirus pandemic. However, the health crisis took a big bite of the state’s gross gaming revenue (GGR).
Last year, the state’s four casinos — the other seven gaming venues are classified as racinos — combined for $643.37 million in revenue, down from $850.98 million in 2019. The four casinos are JACK Cleveland, Hard Rock Casino Cincinnati, and two Hollywood venues. The racinos are Belterra Park in Cincinnati, Eldorado Gaming Scioto Downs in Columbus, MGM Northfield, Hollywood Gaming Dayton, Hollywood Mahoning Valley in Youngstown, JACK Thistledown in Cleveland, and Miami Valley Gaming in Lebanon.
A potential catalyst for Buckeye State operators, including JACK, is sports betting. Last week, Gov. Mike Dewine said he’s optimistic sports wagering will be approved in the state this year. Each of the 11 gaming venues in the state would be eligible for one skin, and there is room for mobile betting operated through those skins.