GLPI reports 2023 revenue growth to $1.44B; execs. optimistic about A's ballpark plans in Vegas

Gaming and Leisure Properties, Inc. (GLPI) announced record results for the fourth quarter and year ended December 31, 2023. GLPI's total revenue for Q4 increased by 9.7% year-over-year to $369.0 million, compared to $336.4 million in the prior year. Revenue for the full year climbed to $1.44 billion from $1.31 billion in 2022.

Net income for the fourth quarter rose to $217.3 million, up from $199.6 million in the prior year. Adjusted EBITDA also saw an increase to $331.4 million, compared to $312.0 million in the fourth quarter of 2022. Moreover, Adjusted Funds from Operations (AFFO) rose 7.3% to $256.6 million. 

Peter Carlino, Chairman and CEO of GLPI, attributed the strong performance to the company's stable base of tenants and strategic acquisitions, including two Bally’s casinos and a $100 million ground lease investment with Hard Rock in Illinois. He highlighted GLPI's role as a financing partner for casino operators and expressed optimism about growth opportunities in 2024.

“Looking forward, we believe GLPI is well positioned to deliver long-term growth based on our gaming operator relationships, our rights and options to participate in select tenants’ future growth and expansion initiatives, an environment conducive to supporting a healthy pipeline of new deals, and our ability to structure and fund innovative transactions at competitive rates," he said.

The real estate investment trust (REIT), dedicated to casino properties, now boasts a portfolio of 61 gaming and related facilities across 18 states. GLPI's financial achievements demonstrate the company's proficiency in generating rental income and managing long-term lease agreements with its tenants.

Execs. discuss A's relocation to Vegas

During the company's earnings call on Wednesday, Brandon Moore, Chief Operating Officer of GLPI, said the company remains optimistic about the plan to bring the Oakland Athletics to the Las Vegas Strip despite a series of events that have prompted some to cast doubt on the team’s intentions. According to Moore, the process is proceeding along the expected timelines.

The Tropicana Hotel and Casino is to close on April 2nd.

GLPI owns the Tropicana Las Vegas site upon which a $1.5 billion, 33,000-seat ballpark is planned. Bally’s, which operates the Tropicana and leases the land the property sits on, plans to close the Tropicana on April 2, to begin readying the site for demolition. The demolition process is expected to take 9 months to a year to complete. 

The A’s plan is to begin construction on the ballpark in April 2025. Between now and then, the team must finalize a series of agreements with the Las Vegas Stadium Authority and obtain the required permitting and financing to begin construction on the stadium. The A’s and Bally’s, are working together to finalize renderings of the site that include the MLB ballpark and a new hotel Bally’s plans to construct after the A’s begin play in Las Vegas.  

As part of the binding letter of intent signed in May by the A’s, Bally’s, and GLPI, the A’s will pay all costs associated with the design development and construction of the stadium and Bally’s will pay all costs tied to the redevelopment of the hotel and casino. The A’s are being provided the 9 acres free of charge from GLPI and Bally’s.

GLPI will contribute up to $175 million for hard construction costs, including demolition, site preparation and the construction of public spaces to be utilized by the stadium. The agreement notes GLPI could also help fund other construction-related costs, pending the circumstances.

Report highlights

Throughout 2023, GLPI completed over $1.1 billion in transactions, including over $760.0 million of traditional real estate acquisitions and $337.5 million of loan funding commitments.  

In addition to providing an update on the ballpark plans, the company kicked off 2024 with the acquisition of Tioga Downs Casino Resort real estate assets for $175 million and the issuance of $400 million of 6.750% Senior Notes due 2033.

"This approach has further elevated GLPI’s role as a leading financing partner for growth funding for casino operators and we are optimistic about a range of growth opportunities that we will pursue in 2024," the CEO stated.

"Ultimately GLPI's strong relationships and experience are significant differentiators that drive our access to and ability to complete transactions. Our tenants' strength, combined with GLPI’s balance sheet and liquidity, position the company to consistently grow its cash flows, raise dividends, and build value for shareholders in 2024 and beyond," he concluded.

Guidance for 2024

Looking ahead, GLPI provided AFFO guidance for 2024, estimating it to be between $1,041 million and $1,050 million, translating to $3.70 and $3.74 per diluted share and OP units. "The guidance assumes no material changes in legislation, regulatory environment, or economic conditions that could adversely affect operations," the business explained.