Desiree Burke: Right. I would say we’re thrilled to own racetracks with gaming component, right. So, it is the regulatory environment has historically allowed slot machines and other gaming because of the license.
Peter Carlino: You don’t love horse racing now, Desiree, okay. That’s — it’s kind of a joke in here. The racing business has been much of my life. But it’s been the entree to a lot of great things for PENN in its time and certainly for us here at GLPI. So, would we own more? We sure hope so.
Haendel St. Juste: Well, Peter, thanks for that. And I wouldn’t wager against you. You’ve got a pretty good track record. Thanks for the color, guys.
Peter Carlino: Thank you.
Operator: Our next question comes from Daniel Guglielmo with Capital One Securities. Please proceed with your question.
Daniel Guglielmo: Hello, everyone. Thank you for taking my question. The first one, Peter, you’ve been in the gaming industry a long time and seen various cycles play out. When you think about ROI projects and things operators can do to bring more people in the door, what do you think is the best bang for the buck? Are there certain projects you’d be excited to see announced by your tenants in the coming years?
Peter Carlino: Wow, that’s a difficult question. Yes. Anything that makes money.
Daniel Guglielmo: PENN’s a good case.
Peter Carlino: Yes.
Daniel Guglielmo: The PENN’s engaging in.
Peter Carlino: Well, yes. and Matthew just points out that PENN is a good illustration of folks wanting to invest more money in their projects, two hotels that they’re talking about Columbus, and at the Diamond Las Vegas [ph], both absolutely need room expansion. And Columbus is long needed a hotel. plus they’re going landside in two Illinois properties, Aurora and Joliet. That’s a positive thing. I mean, we could point to the Casino Queen’s efforts in Baton Rouge and how successful that role into a landside property has been. First, we were much involved in that. It’s a terrific property and it’s had the desired result. It’s really tremendous. So yes, we want to see our tenants investing in opportunities that can — but that, again, it’s on a project-by-project basis. The ones we’re looking at, I think are pretty exciting, pretty positive. So, I’ll go back to my original answer, anything that makes money.
Daniel Guglielmo: Great, thank you. That makes sense. And then kind of on a similar vein and as you guys are kind of looking at development, just how is the development environment changed, if any, this year versus last? Is there anything of note that you’re seeing around kind of labor availability, supply chain underwriting versus actuals? Maybe, Steve or whoever? Thank you.
Peter Carlino: Steve?
Steven Ladany: Yes. so maybe, two things. I think from a development financing perspective, not a lot’s changed between last year and this year. It’s a difficult environment for folks that are trying to raise dollars. So, I think one thing that has maybe shifted a little is I think existing tenants are starting to take more of a longer look at their existing portfolios and what redevelopment opportunities or development opportunities may exist at those locations. So, I think that’s — I think that has increased more recently than maybe a year ago. With respect to supply chains and things like that. I feel like that, that in most cases, things have become a little easier, not easy. There’s still long lead items for mechanical things and like.
but I think that the process and maybe, it’s just that everyone has become more used to it. So, everyone’s adapted a little more. And so to put your order in significantly further ahead than where you used to. But I think things are becoming a little more normalized with respect to the actual construction process.
Daniel Guglielmo: Great, thank you.
Operator: Our next question is from Barry Jonas with Truist Securities. Please proceed with your question.
Barry Jonas: Hey. good morning, guys. Wanted to ask about the Tropicana. Can you talk about where things stand or maybe what are next steps there? I know the property’s shutting down in roughly a month. And then just curious how involved you expect to be in development of the stadium or the prop or the new property. Thanks.
Peter Carlino: Brandon is going to take that; I finally got him to answer something.
Brandon Moore: I’ll answer. Yes. So look, I mean, I think a lot of the news coming out of Las Vegas lately has been somewhat negative questioning the timing and development, and maybe the viability of that project. I think from our perspective, a lot of that’s noise. I think a lot of this is proceeding along the timelines that we would’ve expected. We understand at this point that the valleys and the As are working pretty closely together to ensure that the A’s new stadium design and the integrated resort really maximize the use of that property, that 35-acre parcel and the value that’s there. And we’ve had an opportunity to see the Stadium architectural designs and we’ve seen several variations of the integrated resort designs.
And we still believe that the fully-developed property will be a very good addition to that corner of the strip. I think as far as how involved we’ll be, time will tell. we’re the landowner and obviously, we’re taking a very keen interest in ensuring that the value of the remainder parcel that we hold is sustained. And if we can enhance that, we certainly are looking to do that. But this time, I think we’re waiting to see what Valleys is proposing to do for the integrated resort and then we will figure out what our opportunities are to invest in that. And that in some ways will depend on Valley’s needs for financing. So, I think we’re in kind of a wait and see mode, but we’re still optimistic that this will be a good project on the corner of the strip.
Barry Jonas: That’s really helpful. And then just as a follow-up, kind of wanted to get your thoughts on the potential for maybe doing deals on tribal land. Curious if you have any thoughts on the types of structures that could potentially make sense. Thanks.
Brandon Moore: Yes. I don’t know that I can shed a whole lot of light on the structures themselves. I can say this. we have focused on the tribal land held in trust market as a very large gaming market here in the United States. And if there’s a way that we can find from a REIT perspective to generate good REIT income from an investment with those tribes on those properties, we see it as a tremendous opportunity. We’ve spent quite a bit of time and effort in structuring some things and I won’t say that we’re there. We have a few ideas on how these things could work and we’ll continue to spend some time on that in conjunction with some of the tribes and see if we can come up with a way that we can safely invest in these assets for our shareholders. And I think if we’re able to do that, it’s a tremendous market. but we’ll do so carefully and we continue to work on that.
Barry Jonas: Awesome. Really appreciate it. Thanks.
Peter Carlino: Thank you.
Operator: Our next question comes from Smedes Rose with Citi. please proceed with your question.
Smedes Rose: Hi. Thank you. You’ve been through a lot of questions, but I just wanted to kind of circle back. You mentioned at the beginning that you’re spending a lot of time with folks, where there’s generational ownership issues and maybe, some tax discussions. I guess, two questions, those kinds of deals, are they typically in this kind of rent range, kind of a, call it $15 million, $20 million? And do you feel as a company that you have maybe sort of a competitive advantage against maybe the other experiential REITs or just more traditional REITs, triple-net REITs that want to play in this space? I’m just kind of curious, who you’re seeing kind of at the table when you start engage in these discussions.
Steven Ladany: Yes. look, I — maybe, I’ll jump in and if anybody else wants to hop in afterwards, that’s fine. look, I think as far as the size of the transaction goes, I think, it would be incorrect to assume that, that all sole proprietor transactions will be in the size range of $14 million of rent. The Cordish family transaction was done with a privately-owned business. Obviously, that was well north of $1 billion transaction. So, I don’t think that any deals cut with the same cloth, in particular, like sole proprietor transactions or closely family held businesses, which a lot of gaming enterprises still remain today. Some are very large. Some very notable assets in this country are owned by individual owners or a small group of owners.
So, I definitely don’t think that there’s an indicative size range for that. But separately though, I do think as we continue to do transactions with this type of counterparty and we get, and we perfect kind of our thinking around tax structuring transactions and the use of operating partnership units and the like, I do think we start to gain a competitive advantage. So, I’m — I do think that it’s a, it’s a helpful thing to us as we continue to do transactions with counterparty tenants, that do have this form and shape that we do start to kind of better our position as far as competitive advantage against others in our space.
Brandon Moore: Yes. and I would just add, from the competitive advantage standpoint, as Steve talks about. when we spun this company out of PENN over a decade ago, it was really heavily focused on some very creative and in-depth tax structuring. And I think we’ve kept that notion here at the company and when we look at potential counterparties and potential tenants, we often will put our resources, our tax resources and expertise behind trying to find ways to solve their issues. And so sometimes people come and they say, well, we’d love to transact, but we have these tax issues that we just are going to prevent that. And we say, well, let us take a look at those. We might be able to help you find solutions to those. And so I think to Steve’s point in a competitive advantage, we show a willingness to try to take a problem and see if we can’t put our resources behind it to try to solve it. And I think that’s led to the deals like Tioga.
Peter Carlino: Yes. let me make a small commercial, which I don’t think I’ve ever done before. We — it’s been my practice for many, many years to bring our entire team to these presentations, so that you got a sense, there’s no one person that makes it happen in this company. We have a killer team of people, highly-skilled, highly-capable, highly-motivated, and I think what we do is special. So that’s my answer to your question.
Matthew Demchyk: I think we, I mean, Smedes, as you asked the question, it just reminded me of the Cordish dialogue. I mean, they certainly had the opportunity to talk to whomever they wanted to and hearing directly across the table that the others treat it like it’s other people’s money. But you guys treat it like it’s your own, really underscores the philosophical differentiation with Peter and his history, and being in the industry, the kind of compound difference you’ve been able to achieve. When people decide to take units in the company and become investors alongside us, and this theme of partnership, it leaves them to decisions that might be not fully economic to the last sense. And that’s why in their case, they said, you guys weren’t the best price, you were the best decision.
And we hope to have that align with future dialogues. It certainly gives us case studies we can put out and have them look at, and understand the why behind the decisions that people have made to date.
Smedes Rose: Great. Thank you. I appreciate it.
Operator: Our next question is from David Katz with Jefferies. Please proceed with your question.
David Katz: Hi. Good morning, everyone. Thanks for taking my questions. Look, you covered a ton of ground, I think one of the areas we haven’t really discussed much is international. And the degree to which, you would contemplate assets at this point that are outside the United States. And yes, I do consider Canada to be another international in another country. But any other territories that might be on your consideration board at this point?
Brandon Moore: Yes. I mean, every time a transaction comes up, we do look at it. So, we’ve looked at transactions in South America, Europe, Canada, 20 times. We have spent time, obviously it’s not an easy endeavor, because you have to do a bunch of tax analysis and understand what the leakage is. And when we look at that, just like we do with our underwriting and we look at a risk-adjusted return. we look at what’s the net tax impact cash flow and what does that mean from an investment perspective internationally. So, we have looked in a number of international jurisdictions. We have been on properties in the number of jurisdictions, but we’ve always looked at it with a net tax lens. And therefore, at times, I think that’s maybe caused us to not win in a particular bidding scenario. But nonetheless, that’s the appropriate way we believe to look at these things.
David Katz: And is it fair to — I mean, it sounds as though among the — if not the primary gating factor is the tax element of it.
Desiree Burke: I wouldn’t say that’s the primary factor, but you certainly have to consider that you have leakage to that country that you have to pay before you bring the proceeds back to the U.S. for REIT purposes. You have to take that into consideration and what your return is that you’re really getting, it’s not a primary factor, but it is a factor, which will cause us to need more income in order to overcome that.
Brandon Moore: Yes. I think, when we look at these foreign jurisdictions, tax is certainly one of the leading indicators on whether or not economically it makes sense. But there’s a whole handful of other risks that we have to analyze when we look at that. And if you’re talking about Canada, you may have less so, but you certainly have regulatory risks. There are different regulatory environments. You have currency risks. you have political instability. So, depending on where you are from South America to Canada, the risks could be numerous or they could be a few. but tax is almost always one of them.
