Freeman takes aim; Pinnacle commands high price

Geoff Freeman continues his aggressive agenda at the American Gaming Association. In a move possibly intended to take the heat off American online casinos, he’ll calling for — and promising the AGA will take the lead in — a beatdown on illegal and merely shady forms of gambling, such as Internet sweepstakes parlors and offshore ‘Net casinos. Citing the specter of lost taxes, he said, “One of the things that I want to do is draw a sharp distinction between illegal gambling and legal casinos you may have in your state. We are a heavily regulated business that does things on the up-and-up.”

As for those states which have anti-fantasy-sports laws they don’t enforce, Freeman says they should legalize the practice and let casinos run it. According to The Associated Press, “The [AGA] intends to fund research into illegal gambling to find patterns and ties to organized crime.” It’s an ambitious agenda but it already has the backing of Mississippi Attorney General Jim Hood. He may be but one foot soldier in General Freeman’s army but you’ve got to start somewhere.

* GLPI‘s attempt to take over Pinnacle Entertainment has generated little excitement, so GLPI is taking the best-and-final route, according to the Wall Street Journal, upping its offer from $35.77 to $40/share. Quoth Deutsche Bank analyst Carlo Santarelli, “we pinnacle_logo_lrbelieve the $40 offer has either been previously articulated to PNK and ignored, or turned down.” The raised price places a high-premium 12X cash flow price on the deal, which suggests either desperation or imprudence at GLPI. Adds Santarelli, “If nothing else, given the reluctance to sign off on a deal that would represent a healthy premium from the valuations of January, we believe PNK clearly has considerably more information than what has been articulated to date regarding a potential structure and the consequences of the purge.” Pinnacle has until tomorrow to accept the deal.

J.P. Morgan analyst Joseph Greff isn’t biting on the “best and final” language, writing, “We ascribe a very low probability of PNK not accepting a deal north of $40. If PNK’s management/Board do not engage with GLPI to secure a low $40 offer, we think there is little chance that GLPI would walk away.” He thinks GLPI won’t bother dealing with Pinnacle management but will make future offers straight to the shareholders.

* Speaking of REITs, Land & Buildings‘ attempted partial takeover of the MGM Resorts International board is meeting with a frosty response from MGM, which doesn’t care for the REIT structure proposed by L&B. It’s deja vu for the latter, which got the cold shoulder from Sheldon Adelson when it proposed REIT-izing Las Vegas Sands. MGM, for its part, cites high recent turnover on its own board as one of the reasons not to shake things up further with a heavy dose of L&B candidates.

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