Investment trust to buy casino in East St. Louis

EAST ST. LOUIS, Ill. -- A Pennsylvania-based real estate investment trust will buy the Casino Queen's real-estate assets in East St. Louis for $140 million, the two entities announced Monday.

Properties being bought by Gaming and Leisure Properties Inc. of Wyomissing, Pa., include the 38,000-square-foot, six-year-old casino, 157-room hotel and the park for recreational vehicles consuming much of a 78-acre tract.

The Illinois Gaming Board must approve of the sale, which is expected to be finalized early next year by Gaming and Leisure Properties, which last month was spun off by Penn National Gaming Inc.

As part of the deal, the employee-owned Casino Queen, including the casino that has 27 gaming tables and 1,155 slot machines, will lease the property back from the Gaming and Leisure Properties for about $14 million a year. The Pennsylvania buyers also will provide Casino Queen with a $43 million term loan to refinance and retire Casino Queen's outstanding long-term debt obligations.

"This is our first acquisition as a stand-alone company and is representative of the robust opportunities that exist in the gaming asset markets that our company is targeting," Peter Carlino, Gaming and Leisure Properties' chairman and chief executive, said in a statement.

Carlino said the Casino Queen, which in 2007 moved its gaming site inland from its long-standing place in a Mississippi River riverboat, said the purchase gives the Pennsylvania trust "a newly constructed asset with strong market share to our portfolio and further diversifies our operating partners, while strengthening our cash flow."

The East St. Louis resort had roughly 1.7 million guests during the past year.

"This transaction offers us the opportunity to reorganize our capital structure, with a long-term solution that provides stability for our employee-owners," Casino Queen's president, Jeff Watson, said in a statement. "Further, by unlocking the value in our real estate assets, we are able to focus on efficiently operating our business in a less restrictive, asset-lite environment."

Gaming and Leisure Properties already owns casinos in 13 states, including Missouri and Illinois.

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Information from: St. Louis Post-Dispatch, http://www.stltoday.com