Boyd Gaming could be a step closer to acquiring PENN Entertainment, a move that would alter the casino landscape in Missouri.
The brick-and-mortar casino industry is the largest aspect of the limited gambling options available in the Show Me State. There are 13 casinos in Missouri, and per state law, all are riverboat casinos.
However, these boats are located just a couple feet into the water. Additionally, the casinos are usually connected to a land-based hotel resort.
In other words, the patron will barely notice anything different from a standard casino. Lawmakers have not even begun discussing Missouri online casinos.
On the other hand, lawmakers discussed Missouri sports betting bills during the 2024 legislative session. But none were even brought up for a floor vote.
If the sale happens, it will be the largest gambling company merger in the U.S. since 2020, when Caesars Entertainment completed a merger with Eldorado Resorts.
Rumors about an acquisition intensified this week after a Reuters report indicated that Boyd had approached PENN. Boyd is pursuing the merger even though its market value is $5.12 billion, while PENN’s is over $9 billion.
Regulators would step in to alter the merger outcome
If Boyd succeeds, the company will significantly expand its footprint in Missouri as it already owns two casinos in the state: Ameristar Casino Hotel Kansas City and Ameristar Casino Resort Spa St. Charles.
Penn operates River City Casino Hotel in St. Louis, Hollywood Casino & Hotel St. Louis in Maryland Heights and Argosy Casino Hotel & Spa in Riverside. The operator’s casinos took in 35% of the state’s $1.92 billion adjusted gross revenue in 2023.
Owning nearly half of the state’s casinos would bring Boyd under the scrutiny of the Missouri Gaming Commission. The regulatory agency would most likely require Boyd to sell at least one of its Missouri properties.
Based in Las Vegas, Boyd’s operations include 28 gaming properties across 10 states, online casino interests and a 5% stake in FanDuel.
Obstacles to overcome include competition and investor skepticism
Boyd isn’t the only suitor pursuing. Several media outlets reported Hard Rock International was also in the mix for the company. Owned by the Seminole Tribe of Florida, Hard Rock has 18 casino entertainment properties, with three more on the way.
Another obstacle to a Boyd acquisition is the skepticism of PENN investors. The Donerail Group, activist shareholders of PENN, released an open letter in May criticizing the company’s management decisions and lamenting that the company’s “shares are now down over 80% in the last three years because of such damage.”
PENN’s billion-dollar moves in the past few years include securing a deal with Disney to create ESPN Bet and purchasing Canada’s Score Media and Gaming.
Truist Securities analysts also voiced doubt that PENN would follow through with a sale of the company.
In the meantime, PENN’s stock rose 9% on the day of the Reuters report. Overall, PENN stock fell 25% this year, and according to Barron’s report, analysts have mixed reactions as to whether an acquisition by Boyd is a positive move.
