Following a two-month postponement and an improved pitch, for so-called the biggest casino deal in Florida history, the Florida Gaming Control Commission on Wednesday, February 8, granted conditional approval for the sale of the gambling license from Miami-based Magic City Casino to an Alabama-based Native American tribe, Poarch Band Creek Indians.
Completion of a multimillion- dollar purchase:
This resolution by Florida regulator will permit the PCI Gaming Authority, operated by the Poarch Band of Creek Indians, to finalize the multimillion-dollar purchase of a casino owned by the Havenick family and its West Flagler Associates to manage slot machines, poker and electronic casino games in Miami.
However, the buying price was not revealed, but attorney John Lockwood, who represents both sides of the purchase agreement, aka West Flegler Associates and PCI Gaming, told the commission that “it will be a cash deal.”
In this regard, and with data available form 2019 when PCI Gaming Authority purchased the Sands Casino Resort in Bethlehem, Pennsylvania for $1.3 billion, analysts estimate this purchase deal to be worth nearly $600 million.
First change of casino ownership:
Since the Magic City Casino, formerly known as the Flagler Dog Track, has been owned and operated by the Havenick family for years, this will be the first replacement of ownership.
In this regard, Jay Dorris, president and CEO of Wind Creek Hospitality, the subsidiary of PCI Gaming that will supervise the development project, said: “The new owner have ambitious plans.”
Casino upgrade and renovation plans:
The dog run that is part of the casino is now closed and its 30-acres of property may be the location for an opulent resort connected to the casino, which will look similar to the company’s Caribbean properties and involve shopping centers and “experience-oriented attractions,” according to Mr. Dorris.
In the interview he also said: “We’re very pleased that the commission made their conditional approval. We’ll get the deal closed and we’re going to be very transparent and provide them with whatever info they need.
“This purchase is a fantastic opportunity to expand on a successful business and intends to improve the property and make additional investments.”
Magic City employee retention:
In the near future, Mr. Dorris said that “PCI Gaming intends to retain all Magic City employees, except for some senior executives who will stay with West Flagler Associates.”
He added: “The company will continue to control its other gambling operations, which include a permit to operate summer jai-alai and poker in a future operation near Miami’s Edgewater neighnorhood and the Bonita Springs Poker Room near Fort Myers.
“There will not be any immediate changes but I hope to get the company’s awards club for patrons going soon.”
The most important decision made by the Florida Gaming Control Commission:
This conditional approval by the Florida regulator is one of the most significant unanimous decisions by the Florida regulator, which is without one member since its former president John Mclver stepped down.
The commission was created by the Legislature and officially launched last year with the primary task of regulating iGaming operations in Florida.
In December, the regulator stopped the property purchase deal between West Florida Associations and PCI Gaming and instructed the companies to release a large portion of 103 redacted pages from the 110-page application.
Then in January, PCI Gaming changed the proposal by replacing one subsidiary, Wind Creek Miami LLC with Gretna Racing LLC, an entirely-owned subsidiary, as the lead entity to buy 100% ownership and equity interest in the Magic City Casino license. The agreement involves a parimutuel operating license, a card room license and a slot machine license for fiscal year 2022-23.
However, Gretna Racing, unlike Wind Creek Miami, already owns a parimutuel license for quarter horse racing and a card room, which makes it easier for it to acquire the slot license, which is currently owned by West Flagler Associates. As the slot license was sold in the middle of the year, Gretna Racing needs to pay $1 million of the $2 million license fee, according to Mr. Lockwood.
Request for conclusion of the contract within 30 days:
The Florida regulator has requested that the sale agreement close within the next 30 days and that all final details be provided to the regulator for final approval.
In this regard, Ross Marshman, general counsel of the commission, said: “If it happens as described, it can be approved.
“But we have to actually see evidence that what was described actually took place.”
Opponents of the deal:
So far, the only opposition to the deal is the Seminole Tribe, whose attorney Marc Dunbar gave the commission a history lesson on the legal model behind the transfer and sale of parimutuel licenses.
He said: “Sale to Gretna Racing should not be allowed, not because the company was not a good operator, but because the commission was establishing precedent that was not regulatory best practices.”
He also added: “This is the most expensive gaming transaction – if you believe industry rumors – in Florida’s history. And so, I would encourage you to proceed with diligence… The Seminole Tribe is not opposed to West Flagler selling its permit or any slot machine licensee selling its permit. It’s just making sure it complies with the statutes.”
According to official documents, the contract for the purchase was signed on September 20, 2022, between West Flagler Associates and PCI Gaming Authority.
Purchase involves all “house cash”, all listings, all contracts, vehicle and trailers licenses.
But that’s not all; as they also indicate that PCI will lease assets for future casino upgrades.
In this regard, Mr. Dunbar said: “The commission should have access to those details, which were not released with the application.”
When asked whether the commission did everything properly before making the decision, they answered that everything was according to the rules.
Source: Read Full Article