The Jamul Indian
will be rebranding its casino in southern California after parting ways with the developer of the $460 million facility.
The tribe opened the Hollywood Casino Jamul
, the closest to downtown San Diego, in October 2016 with backing from Penn National Gaming
. The firm, under a federally-approved management contract
, received 30 percent of the net revenue and a licensing fee of 2 percent from the facility.
But the relationship doesn't appear to working out on a financial level. While Penn National recently boasted of record fourth quarter revenue,
it also disclosed that it took an "impairment charge of $48.5 million" on a loan issued to the tribe.
"The Jamul Tribe is currently in default on its loan obligations," the firm stated on February 8.
A few weeks later, Penn National was spilling further ink on the arrangement. According to a March 1 filing with the U.S. Securities and Exchange Commission
, the firm is recording "additional charges" of $29.4 million related to its loan to the tribe.
The figures indicate that Penn National is owed $77.9 million from the tribe, based on a previously issued $98 million loan.
That same day, the tribe confirmed that it will be taking over the property, which will now be known as Jamul Casino. Employees aren't expected to be affected during the transition.
“Our announcement today represents an important step toward our long-held goal to manage our own casino,” Chairwoman Erica Pinto said in a press release
. “We are grateful to Penn National for all their hard work and leadership in bringing what was a very challenging development project to fruition.”
The relationship will officially end May 28, according to the SEC filing.
Read More on the Story:
Financial backers cut ties with Jamul Indian Village casino
(The San Diego Union-Tribune March 1, 2018)
Penn National Gaming severs ties with California tribal casino
(CalvinAyre.Com March 2, 2018)
Is San Diego's casino industry over-saturated?
(The San Diego Union-Tribune March 3, 2018)
Penn National Gaming owed $49M from Calif. casino, to cut ties
(Lehigh Valley Business March 5, 2018)
Federal Register Notice:Notice
of Availability of a Draft Supplemental Environmental Impact Statement for the
Jamul Indian Village Proposed Gaming Management Agreement, San Diego County,
(March 14, 2016)
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