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Penn National Gaming Completes Acquisition of Greektown Casino-Hotel

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Acquisition of Established Downtown Detroit Property Further Expands
and Diversifies Penn National’s Regional Gaming Platform to 42
Properties in 19 Jurisdictions and Adds Largest Single Property Customer
Database to Loyalty Program

Transaction to be Immediately Accretive to Operating Results with a
Post Synergy Multiple of Approximately 6.3x

WYOMISSING, Pa.–(BUSINESS WIRE)–Penn National Gaming, Inc. (PENN: Nasdaq) (“Penn National” or the
“Company”) announced today that it completed the purchase of the
operations of Greektown Casino-Hotel in Detroit, Michigan (“Greektown”)
from JACK Entertainment, LLC for approximately $300 million in cash. The
transaction was financed with a combination of cash on hand and
incremental borrowings under the Company’s revolving credit facility.
The purchase price represents a multiple of approximately 6.3x
anticipated annual run-rate adjusted EBITDA, inclusive of synergies to
be realized within eighteen months.

Simultaneous with the closing of the transaction, Penn National entered
into a triple net lease agreement with VICI Properties Inc. (NYSE: VICI)
(“VICI”) for the Greektown facility. The lease has an initial annual
rent of approximately $55.6 million and an initial term of 15 years,
with four 5-year renewal options. The rent coverage ratio in the first
year after closing is expected to be 1.8x.

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Timothy J. Wilmott, Penn National’s Chief Executive Officer, stated, “We
are pleased to be entering one of the nation’s largest regional gaming
markets, and to be operating the only casino in the heart of the
revitalized downtown Detroit area. We look forward to welcoming patrons
from high profile nearby attractions, such as Comerica Park, Ford Field,
Little Caesars Arena, the city’s theater district, GM’s Renaissance
Center and the Cobo Conference Center. We’re also excited to be adding
the largest single property customer database to mychoice, our
soon-to-be re-launched and enhanced player loyalty program.

“Our expanded scale will allow us to generate synergies over the first
six quarters of operations, at which time we anticipate an OpCo purchase
multiple of 6.3x projected annual run-rate adjusted EBITDA. With the
expected increase to our free cash flow per share, we will remain well
positioned to reduce lease-adjusted net leverage to 5.0x to 5.5x by the
end of next year.”

Opened in 2000, Greektown Casino-Hotel features 100,000 square feet of
casino space, approximately 2,700 gaming machines and 60 table games, a
poker room, three restaurants, seven fast casual food outlets, four bars
and a coffee shop. In addition, the casino boasts a AAA Four Diamond
400-room, luxury high-rise hotel with 14,000 square feet of event and
catering space. The property employs approximately 1,700 team members
and has partnered with nearly 20 local restaurants to offer fine dining
rewards to guests. The Greektown property will be included in the
Company’s Northeast reporting segment for financial reporting purposes.

About Penn National Gaming

Penn National Gaming owns, operates or has ownership interests in gaming
and racing facilities and video gaming terminal operations with a focus
on slot machine entertainment. The Company operates 42 facilities in 19
jurisdictions. In total, Penn National Gaming’s facilities feature over
51,000 gaming machines, over 1,300 table games and 9,000 hotel rooms.
The Company also offers social online gaming through its Penn
Interactive Ventures division and has leading customer loyalty programs
with over five million active customers.

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Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding the expected benefits of the acquisition
of Greektown Casino-Hotel on the Company’s results of operations and
future operating performance, including the Company’s ability to
generate synergies and reduce its net leverage. These statements can be
identified by the use of forward looking terminology such as “expects,”
“believes,” “estimates,” “projects,” “intends,” “plans,” “seeks,” “may,”
“will,” “should” or “anticipates” or the negative or other variations of
these or similar words, or by discussions of future events, strategies
or risks and uncertainties. Although the Company believes that its
expectations are based on reasonable assumptions within the bounds of
its knowledge of its business, there can be no assurance that actual
results will not differ materially from our expectations. Meaningful
factors that could cause actual results to differ from expectations
include, but are not limited to, risks related to the acquisition of the
Greektown Casino-Hotel operations by the Company and the integration of
the business to be acquired; potential adverse reactions or changes to
business or employee relationships, including those resulting from the
completion of the transaction; the possibility that the anticipated
benefits of the transaction, including achieving the financial results,
generating synergies and reducing the Company’s net leverage, are not
realized when expected or at all, including as a result of the impact
of, or issues arising from, the integration of the companies; and other
factors as discussed in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2018, subsequent Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K, each as filed with the United States
Securities and Exchange Commission. The Company does not intend to
update publicly any forward-looking statements except as required by
law. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this press release may not occur.

Contacts

William J. Fair
Chief Financial Officer
610/373-2400

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Joseph N. Jaffoni, Richard Land
JCIR
212/835-8500 or [email protected]


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