Pinnacle Entertainment, the owner of East Chicago's Ameristar Hotel and Casino, is in talks with gaming operator Penn National Gaming that could result in Pinnacle's sale.
Las Vegas-based Pinnacle and Wyomissing, Pennsylvania-based Penn acknowledged the discussions late last week.
"These discussions may or may not lead to any transaction," each company said in identically written statements, "and the company does not intend to comment further on market speculation or disclose any developments unless and until it otherwise deems further disclosure is appropriate or required."
A combination of the two companies would require approval from their boards of directors and shareholders, as well as state and federal regulators. Among the issues they would need to address is Indiana's limit on casino ownership.
State law allows an owner to hold a maximum of two casino licenses. Pinnacle currently owns Belterra Casino Resort near Vevay as well as Ameristar, and Penn owns Hollywood Casino in Lawrenceburg.
The two companies are also linked through the real estate investment trust Gaming and Leisure Properties Inc., which owns the casinos' real assets and leases them to Pinnacle and Penn. Those companies retain the gaming licenses.
Penn also owns the Hollywood casinos in Aurora and Joliet, Illinois, and Prairie State Gaming, a video gaming terminal operator with more than 1,100 gaming terminals at 270 bars and other retail gaming establishments in Illinois.
Positioned to grow
Pinnacle executives have talked this year about growing the company through acquisitions of its own. President and Chief Financial Officer Carlos Ruisanchez said during the company's second quarter investors' call that Pinnacle was "actively evaluating businesses."
"We believe we're well positioned to add to our portfolio," he said during the Aug. 10 conference call.
Chairman and CEO Anthony Sanfilippo reiterated that during the company's third quarter conference call Nov. 7, while declining to comment specifically on a potential Penn deal. He said that "we think we are in a good position if we see opportunities to grow our portfolio."
An acquisition by Penn Gaming would be in a cash and stock transaction, according to the two companies.
Penn National has 29 properties; Pinnacle has 16. A combined company would have more than $5 billion in revenue.
The Associated Press contributed to this report.