“We are delighted to announce these exciting new growth projects, which we expect will generate strong free cash flow returns and create long-term value for our shareholders," Penn Entertainment President and CEO Jay Snowden said in a statement. "Our casino properties remain at the core of our omnichannel approach to entertainment, which combines best-in-class retail operations and a database of more than 26 million myChoice members with a rapidly growing interactive and media footprint.

“Since opening in 2012, our Columbus property has experienced tremendous growth, and the addition of a hotel at the property will create a true regional destination. At the M Resort, the addition of a second tower will benefit from the strong demand in the Henderson locals market while providing additional capacity for the group business that is drawn to our market-leading resort and amenities, including our highly successful partnership with the Las Vegas Raiders."

In connection with these projects, Penn has entered into an agreement with Gaming and Leisure Properties to create a new master lease that would include the two new facilities in Aurora and Joliet, in addition to Hollywood Columbus (Ohio), Hollywood Toledo (Ohio), the M Resort (Henderson, Nev.), the Meadows (Washington, Pa.) and Hollywood Perryville (Md.). Pursuant to this agreement, GLPI will provide up to $225 million at a 7.75 percent cap rate for the Aurora project. With respect to the Columbus, Joliet and M Resort projects, Penn may elect to receive up to $350 million of funding in the aggregate from GLPI for real property improvements at then-current market rates, which will incorporate a spread to GLPI’s cost of capital. Additional details on the new master lease, which will be effective on Jan. 1, 2023, are included in the company’s 8-K filing.

“The overall estimated budget for these new growth projects is approximately $850 million,” Snowden said. “With the ability to access attractive financing from GLPI covering up to $575 million of the anticipated costs, along with up to $50 million from the city of Aurora, subject to final approvals, we have the opportunity to pursue these high growth projects while preserving our cash position and leverage profile."

Hollywood Columbus Hotel Development

Penn is planning to construct a new hotel at the Hollywood Casino Columbus. The project, with an estimated budget of approximately $100 million, is expected to include 180 rooms as well as new food and beverage offerings. The hotel will be attached to the company's existing casino. Construction of the new property is expected to begin in late 2023, subject to regulatory approval.

M Resort Hotel Tower Development

Penn is planning the addition of a second hotel tower at M Resort in Henderson, Nev. This project, with an estimated budget of $206 million, would add approximately 384 rooms to the company’s property south of the Las Vegas Strip, bringing its total to 774 rooms and suites. Along with the rooms, there will be expanded meeting space, updated amenities and additional local partnerships that will be announced at a later date.