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Penn National applies for state gaming license after acquiring small slot stake

Casino operator Penn National Gaming, one of the Strip’s most widely rumored suitors, has applied for a Nevada gaming license after acquiring 1 percent of a small slot machine distributor.

The move allows Penn National, which operates 19 casinos and racetracks in regional markets, to gain Nevada licensing approval before buying a Strip casino. The company, which has roughly $1.5 billion in available cash, has been linked since last year to numerous casino acquisition rumors along the Strip.

The company has been public about its interest in Las Vegas but has also said it was taking its time in finding the right deal.

Penn National filed an application with the Gaming Control Board on Wednesday for registration as a publicly traded corporation.

The company is acquiring 1 percent of Morris Goldstein and Associates, an independent slot machine manufacturer and distributor. Goldstein is a former president and chief executive officer of Alliance Gaming, now known as Bally Technologies.

In addition to Penn National as whole, the company’s top executives also filed for licensing approval, including Chairman and Chief Executive Officer Peter Carlino, President and Chief Operating Officer Tim Wilmott, Chief Financial Officer Bill Clifford and Vice President Robert Ippolito.

“The strategy is ultimately to have the mechanism ready to do something, should something fall into place,” Penn National spokesman Joe Jaffoni said. “The company is still interested in Las Vegas.”

Union Gaming Group principal Bill Lerner said getting licensing approval now could help Penn National negotiate a better price multiple for a Strip casino. Having their Nevada background checks already in place could also help speed up a transaction.

“If closing a deal more quickly is important, a seller might be willing to give up some dollars in exchange for speed,” Lerner said. “It’s a good heads-up move by Penn National to move forward.”

Las Vegas gaming attorney Frank Schreck, who represents Penn National, wasn’t sure how long the licensing process will take, but said Penn National “would move to the front of the queue” if the company acquires a Las Vegas resort.

Analysts have linked Penn National to several potential purchases, including casinos operated by MGM Mirage and Harrah’s Entertainment. During its first-quarter earnings conference call in April, Carlino said the company was taking its time assessing different Las Vegas assets.

“Time alone will tell whether we can find the right opportunity at the right price,” Carlino said.

Shares of Penn National, traded on the Nasdaq National Market, closed at $28.69 Monday, up $1.36, or 4.98 percent.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

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