Gaming & Leisure Properties Inc. won’t be a passive investor in $1.8 billion Bally’s Chicago, according to Deutsche Bank analyst Carlo Santarelli. In an investor note published this morning, Santarelli wrote, “It appears GLPI will be taking an active role in the design and construction of the facility.”

GLPI’s control will be gained in exchange for $940 million in construction financing at an 8.5 percent interest rate. The real estate investment trust (REIT) also obtains, for $250 million, a ground lease on the site, which Bally’s will rent for $20 million a year.

Santarelli estimated that the transactions would generate $100 million in annual revenue for GLPI, implying a return on investment of $200 million to $240 million per year. Nor was that the end of the multi-pronged deal.

Bally’s sold its eponymous Shreveport and Kansas City casinos to GLPI for $395 million. They will be rented back for $32.2 million. According to Santarelli, this implies annual cash flow of $71 million for the pair.

Beginning October 1, 2026, GLPI will have the right to purchase Bally’s Lincoln, in return for a markdown on the property from $771 million to $735 million. “The initial rent for the transaction is $58.8 mm, implying an 8.0% yield, which compares favorably to the 7.6% yield previously in place,” Santarelli reported.

In a separate note, J.P. Morgan analyst Joseph Greff opined that GLPI would have to take on an additional $1 billion in debt in order to swing the deal. “GLPI will own all funded improvements [to Bally’s Chicago], which will be leased to Bally’s with rent commencing at a rate of 8.5% as advances are made.”

Bally’s will pay rent on the land during construction. A phased buildout of the property has been abandoned in favor of full construction, in order to meet a September 2026 deadline. When finished, Bally’s Chicago will offer 3,300 slot machines and 173 table games (poker tables included).

According to Greff, “Once fully completed, the property will feature a 500-room hotel with a portion of the rooms above the casino and the remainder in an adjacent 27-floor tower. The hotel will include a full-service spa, fitness center and pool, along with a rooftop bar.

“Bally’s Chicago will offer a premium steakhouse, noodle bar, nightclub, food hall and other bars and lounges. It will also include more than 100,000 square feet of event and meeting space and nearly 3,000 valet and self-park parking spaces.”

In total, the sales and option would bring $2.07 billion in financing to Bally’s, more than enough to finance its Chicago venture, as currently budgeted. The transaction is expected to close in the fourth quarter of this year, subject to regulatory approvals.

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