Greetings, and welcome to the Gaming and Leisure Properties, Inc. Second Quarter 2025 Earnings Conference Call and Webcast. It is now my pleasure to introduce your host, Joe Jaffoni, from Investor Relations. Thank you. You may begin.

Thank you, Shamali, and good morning, everyone, and thank you for joining Gaming and Leisure Properties Second Quarter 2025 Earnings Call and Webcast. The press release distributed yesterday afternoon is available in the Investor Relations section on our website at www.glpropinc.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today. Forward-looking statements may include those related to revenue, operating income and financial guidance as well as non-GAAP financial measures such as FFO and AFFO. As a reminder, forward-looking statements represent management's current estimates, and the company assumes no obligation to update any forward-looking statements in the future. We encourage listeners to review the more detailed discussions related to risk factors and forward-looking statements contained in the company's filings with the SEC including its Form 10-Q and in the earnings release as well as the definitions and reconciliations of non-GAAP financial measures contained in the company's earnings release. On this morning's call, we are joined by Peter Carlino, Chairman and Chief Executive Officer of Gaming and Leisure Properties. Also joining today's call are Brandon Moore, President and Chief Operating Officer; Desiree Burke, Chief Financial Officer and Treasurer; and Steve Ladany, Senior Vice President and Chief Development Officer. With that, it's my pleasure to turn the call over to Peter Carlino. Peter, please go ahead.

Well, thank you, Joe, and good morning, everyone. We're pleased to announce another good quarter where almost everything that we're working on has been moving according to plan. I promised you last quarter that we would achieve and should achieve a very strong year in calendar year '25, that's still the case. Timing, unfortunately, doesn't always align with our four quarterly calls. So stay tuned, we still stand by that. In the meantime, in this seemingly quiet quarter, we achieved a record year-over-year revenue, AFFO, adjusted EBITDA and so lots of good stuff happening, which we are excited to report as this year unfolds. With that, I'm going to quickly move to Desiree Burke, and Desiree, please go ahead.

Sure. For the second quarter of 2025, our total income from real estate exceeded the second quarter of 2024 by over $14 million. This growth was driven by increases in cash rent of over $22 million resulting from acquisitions and escalation. So we have Bally Chicago land, $5 million; the Tropicana funding, $1 million; Kansas City and Shreveport $8 million; Rockford loan, $1 million; strategic acquisition, $1 million; Ione loan, $0.6 million; and the recognition of escalators and percentage rent adjustments added $4.9 million of cash income. The combination of noncash revenue growth, such investment and lease adjustments and straight-line rent adjustments partially offset these increases, driving a collective year-over-year decrease of approximately $8.2 million. Our operating expenses increased by $65.6 million, primarily resulting from a noncash adjustment in the provision from credit losses due to a more pessimistic forward-looking economic forecast that is used in the estimation. It should be noted that all our rent payments are current from all of our tenants. For the company's development properties, just a reminder that we continue to capitalize interest and defer all rent during the development for financial reporting purposes; however, we do add back that rent and deduct that interest in deriving at AFFO. In today's release, our full year 2025 AFFO guidance is ranging $3.85 to $3.87 per diluted share and OP units. Please note that our guidance does not include future transactions; however, it does include our anticipated funding of $130 million from the Joliet relocation project as well as $375 million for development projects with approximately $338 million remain at the fund during the second half of 2025. Our rent coverage ratios range from 1.69 to 2.72x on our master leases as of the end of the prior quarter end. With that, I'll turn it back to Peter.

Thanks, Desiree. And with that, we'll move to questions. Operator?

Our first question comes from the line of John Kilichowski with Wells Fargo.

I just wanted to start by revisiting your interest in the Lincoln call option at the end of next year?

It still remains and something we're counting on. What can we tell you about that?

Well, I'm just getting a fair bit of interest on my end from investors, and I wanted to get your thoughts on this and really as Bally's as a tenant. Fitch recently downgraded them to ratings watch negative based on negative free cash flow assumptions for '25 and '26. So it seems like the only way to plug that funding gap would be with that sale leaseback capital. So I just want to hear about how you think about growing with them as an operator when one of the only solutions to keep them out of the default is to kind of grow exposure to them.

Brandon?

Thank you, John. Regarding Lincoln and its relationship to Bally, we currently own a significant portion of Bally's real estate portfolio. The key question for us is whether Lincoln is an asset we'd want to acquire at the current cap rate, price, and market conditions. We need to assess if it would strengthen our portfolio and how it would impact our overall holdings. As this opportunity arises, we are conducting market studies and research to ensure that the terms we've negotiated remain beneficial and enhance our portfolio. We acknowledge the challenges related to Bally's and our involvement in their operations in Chicago and Las Vegas, as well as various ongoing projects. However, we are evaluating Lincoln on a property level to see if it adds value to our portfolio.

Our next question comes from the line of Brad Heffern with RBC Capital Markets.

On Bally's prospects, the Bally stock referenced a $2.5 billion commitment from GLPI. I understand that this specific project faces significant hurdles for approval. Considering what you mentioned about the risk-reward of Lincoln, which is much smaller, how do you assess the risk-reward balance regarding that level of commitment to Bally's for this project or any others, especially in light of leverage and funding concerns?

You want to take that, Steve?

Sure. We have been in discussions with various parties regarding all of our New York projects and remain interested in a range of opportunities. We're open to engaging with multiple stakeholders. Currently, it's difficult to predict which properties will receive licenses and how neighboring locations might affect our properties. As we gain clarity on the process, we’ll have a better understanding. Many parties are seeking letters of strong confidence from banks or financing partners. Concerning our relationship with Bally's in New York, we still hold the right of first refusal for the entire state, not just downstate. This positions us well to assess real estate and financing opportunities there. We are open to discussions not only with Bally's but also with other stakeholders, and we have already had many such conversations. In this case, they chose to include our name in their application rather than that of the banks.

Let me add and highlight something Brandon said earlier, and that is that we look at these projects on a property-by-property, project-by-project basis and underwrite them in a freestanding sense so that they have to stand on their own merits. And I think we ask ourselves, is this a property we want back under any circumstance, is it strong enough? So we look at it one at a time.

Okay. Got it. And then on the Casino Queen lease combination, can you give some insight into the give and take there? I assume you would have preferred to keep the Bally's corporate guarantee, but then you were able to get this incentive for them to keep the leverage below 5.5x. So I guess, how do you see those changes netting out?

Yes. I'll start there because I do think there's some confusion with our wording in the press release. So Bally's Master Lease 2, we still have the parent guarantee. It's on the Casino Queen lease that we took the St. Louis property and the Baton Rouge property out of that lease and moved it to Bally's Master Lease 2. So it's really only that residual lease of Casino Queen which leaves The Belle project as well as Marquette that is without the parent guarantee, but it does have a guarantee from Bally's entities underneath. And the reason that we did that was to accommodate Bally's, and we had proposed to do that because it was in an unrestricted group versus a restricted group within their credit facility.

Our next question comes from the line of Barry Jonas with Truist Securities.

This is Jeremy standing in for Barry. I'm interested in your thoughts on the upcoming transaction and how it will impact Bally's credit profile.

I'll give that to Steve.

Sure, thanks for the question. From our perspective, there are likely two major benefits that Bally's will gain from the transaction. First, in terms of liquidity, there will be a significant amount of proceeds coming back to Bally's. Dave has expressed the intent to use these funds to pay down secured debt. This infusion of liquidity will enable the debt reduction, which will ultimately improve collateral coverage for any remaining secured debt. Secondly, we believe that the substantial paydown will likely create a more straightforward process for lifting the restriction on the Lincoln sale leaseback, potentially providing $735 million in total proceeds to Bally's if that deal is completed. Another point to consider is that the refinancing risk associated with their secured debt, which has been a concern for the company in 2026, has now decreased due to the significant paydown. Overall, we see this as a favorable outcome.

Got it. That's super helpful. And then just one quick follow-up. Peter, curious to get your thoughts on the Big Beautiful Bill and implications for REITs as well as your tenants?

Boy, I'm not sure I'm the best person at this table to answer that question. I don't think we've gotten really around to getting a grasp on the full impact of that. Des, what do you...

There's discussions about how it impacts REITs, but for GLPI, it will have very little impact on GLPI. And I really haven't spoken to any of our tenants about how they're viewing the bill for themselves. But clearly, the tax rate remaining lower from a corporate perspective is a positive.

Yes, I haven't heard any negative. So I'm looking around the table and I think we all feel likewise.

Our next question comes from the line of Robin Farley with UBS.

I wanted to go back to the provision for credit losses in the quarter. It's a large one relative to what you've done historically. You mentioned that nobody is delayed on payments. I think in your annual filings, it looks like a lot of the provisions for credit losses based on commercial real estate price index changes. And I don't know if they've released Q2 data yet. So I don't know, if you could give us some color on that provision, that expense this quarter?

Sure. So we use Oxford Economics and we use a very detailed model that is done by a third party called Trep. Sorry. But the GDP forecast that is in that Oxford Economic assumptions declined from the prior quarter. So they give you a base case, a downside case and an upside case. The upside case and the base case weren't too bad, but the downside case and they referenced the uncertainty caused by tariffs as a reason for their downside case showing a decrease in GDP growth as well as they're showing the CRE index growth declining from what it looked like prior quarter. It was still increasing, but it was a decline quarter-over-quarter, which caused the charge. Look, anything can happen in the next quarter, but these are all based on assumptions of where the economy is and where it's going in the future and not necessarily based on whether or not we're receiving our cash rent, which is why I added that statement in.

Yes, it's an unfortunate requirement. It's not a real number and shouldn't be taken too seriously. However, we do comply with it.

No, that's fine. I just wanted to understand that if it's this outside the assumptions of an outside economic group rather than something that you're seeing fundamentally. So great.

Yes. It is outside. Yes.

Thanks, Des.

Our next question comes from the line of Anthony Paolone with JPMorgan.

Great. Peter, you started off talking about how things are moving according to plan. And so can you talk about just progress towards maybe a tribal deal this year. So I think you've talked about that in the past as maybe something that's in the cards?

Happy to as much as we can say, but I'll turn that over to Brandon.

Yes, we are currently in advanced discussions with a few tribes. I need to emphasize that any deal we reach with a tribe will need to be reviewed by the NIGC, and the timing of their review will affect when we can announce any definitive transaction. We have engaged with tribes in Oklahoma, California, New York, and Connecticut, and there is significant interest. We are also having initial discussions with a range of other tribes. The educational process regarding the type of financing we can provide and the conditions under which we can offer it is becoming more familiar to the tribal communities, and we are receiving a lot of positive feedback. However, as mentioned earlier this year, this process will take time. We are beginning to see some positive outcomes from our efforts, but whether we can finalize a couple of these tribal transactions will likely be clearer in the next few months.

Okay. And so would you announce and then take it through that process or you'd have to go through the process before you even announce it? Like how would that work?

It's a fair question.

Yes, it's a fair question. I think in some ways, it depends on the tribe and the operator, if there's a third-party operator and their motivation. So for example, if somebody else wants to put it out there, we will indicate that we are part of it in our role in it. I guess if we had our way, we probably would wait until we had a concrete transaction through the NIGC to roll it out to the market just so we don't get people stirred up in one direction and then ultimately have to back off of it. So I think it will depend on the facts and circumstances of the project and whether or not that project is going to be public anyway.

I agree with everything Brandon said. However, I would like to emphasize that we currently don’t foresee a scenario where GLPI would finance any part of a transaction without the final approval from the NIGC. This is an important distinction. While I understand that some recent deals have been announced with pending NIGC approval, we do not intend to proceed in that manner.

Okay. I understand. And then just my other question for Desiree, maybe. Just over the next 18 months, any thoughts on just how you think about refinancing debt? You did a couple of hundred million of the swaps in the quarter and just trying to think about how early you want to address those or any other types of approaches to it?

Yes. So you're absolutely right. We started with the $200 million in hedges, right, towards the $975 million, and we are internally reviewing our options and looking at the markets and the pricing and the spreads. The spreads happen to be pretty tight right now, which is good. But there's nothing I can really signal that we're doing at the moment, but know that we are on it and we are well aware of our future commitments.

Our next question comes from the line of Todd Thomas with KeyBanc Capital Markets.

First, I just wanted to follow up on that last question actually. Desiree, when did the forward interest rate swaps commence? And are there additional interest rate swaps being considered or are you currently comfortable with where your variable rate debt exposure is today?

Yes. The swaps I mentioned are forward starting swaps that hedge future bond issuances. They differ from typical interest rate swaps and can be effective anytime. If we issue a bond next month, they would be aligned with that bond, lowering the interest rate we would receive based on current market conditions. Am I considering more swaps? It really depends on interest rates and the economic news coming out next week. We'll be monitoring closely to see if we want to add any more swaps based on market developments next week.

Yes. Let me add just a virtuous comment that, look, we have a lot of things on the horizon. We're very mindful of our requirements and spend a great deal of time sort of trying to noodle out where we can best head down that path. So we're very attuned to what our requirements are going to be, and we're going to be ahead of it as we possibly can. Nobody is asleep around that issue.

Okay, that's helpful. I wanted to ask about the recent management changes, particularly the time the company went without a Chief Financial Officer before appointing Desiree, and now the elimination of the Chief Investment Officer role. I know there's a lot happening and that the pipeline is active. You've mentioned tribal deals, but I'm curious about the broader implications of this decision regarding the investment landscape and opportunities you foresee in the coming years.

The quick answer is no. There isn't any change in our thinking or behavior. We operate on a fairly flat basis, as you noted, prior to Desiree's appointment. We have about four people involved. Any financial decisions made are done with input from everyone at the table. Steve is focusing on all gaming-related matters, while Matt joined us effectively early on to bring an investor's perspective and understand what it means to be a REIT and serve our shareholders well. He contributed positively in that regard. His role and agreement were mainly centered around nongaming issues. We had hoped to explore more opportunities outside of gaming, but that never really came to fruition because we find ourselves in such a strong position. We haven't found anything better, so there are no changes for the team. We wish Matt well and thank him for his contributions in the early days, and that's all there is to say about it.

Our next question comes from the line of Haendel St. Juste with Mizuho Securities.

Desiree, I wanted to follow up, I guess, on the capital deployment outlook for the back half of the year. You outlined, I think there's another $338 million is still expected to be deployed in the second half of the year. So I'm curious, how much of that is tied to Bally's versus other projects like The Belle and I think Ione and what's the risk of some of that slipping into next year?

Yes. So as you know, we didn't change the number for this year. So we're still at $375 million for the full year. And yes, we only funded $25 million or so in the second quarter. The majority of it is definitely Bally's. I will tell you that since The Belle is opening in the fourth quarter or at the end of the year, that will likely be fully funded, but the majority of that remainder to be funded is mainly Bally's Chicago project and we feel good about the number.

Okay. Fair enough. And then maybe a follow-up on Bally's, but from a different perspective. Curious, we're getting some questions from investors on the lack of a guarantee there. So I guess your thoughts on why the Bally's Chicago's lease does not have a guarantee considering the Bally's credit profile and the inherent development risk for that project? And then maybe some color on how you're underwriting potential inflation and tariff headwinds tied to construction costs at that project?

Yes, this is Brandon. I can address the guarantee aspect. During our negotiations regarding Chicago, that development falls under Bally's credit unrestricted group, which means they cannot provide a parent guarantee for that project. In their 8-K filing about the development agreement, they mentioned a possible pathway to include the Chicago property in the parent guarantee and the restricted group, but this will only happen once the development is complete and certain other requirements are met. Bally's is comparable to the Marquette, The Belle, and other development projects that are not currently generating cash flow in the unrestricted group. There are other assets in that group that we feel confident about. Overall, with respect to Chicago, our assessment of that project indicates that even if Bally's were to sell it or face corporate challenges, it remains a strong project. We know of various potential tenants who would be eager to occupy that location in Chicago. Therefore, our concerns about the risks of having it in the unrestricted group are minimal at this time, which explains its current positioning.

Yes. Let me make a couple of comments. First, The Belle is a terrific project. You know how successful the Queen was in Baton Rouge and The Belle is moving along extraordinarily well, and it's going to be a very cool project. It will be successful. I have no worries about that at all. In Chicago, we're much involved. Jim Baum, our Head of Construction, is out there several days a week, every week. And we have a team of people, the coming group, whose sole responsibility is to track cost, approve bills, invoices, work in place and so forth. And then finally, I can say with some enthusiasm, the project is moving along pretty quickly. Over 100 people working at that site every day right now, more to come. And we feel pretty good about that. So at the moment, things are looking good. And I think I've committed and we'll try to get it out next week to start with a quarterly newsletter, if you will, that kind of lays out progress at the Chicago site, maybe including some photographs, letting people recognize this is a real project moving along very, very well and that we're pretty excited about it.

It might be an opportunity, too, for us to clear up a little bit of confusion that there's been around a Chicago development agreement that was recently filed. There was some confusion that there had been a change in economics or terms associated with that. The reality is that the development agreement, the first version of that development agreement that was signed after the binding term sheet. So there have been no changes in the economics. We've finally agreed to certain terms related to that project, and that was the filing of the document. So there was no change. That wasn't an amendment, and there was some confusion around the cap rate on the lease property that was originally 8%, it's still 8%. The improvements are at 8.5% cap rate, but there were no changes in the economics in that transaction either.

And that's also the reason why we haven't had any draws under that contract to date until all that was signed and done and committed and that will follow shortly.

Our next question comes from the line of Ronald Kamdem with Morgan Stanley Investment Management.

It's Jenny on for Ron. I just want to follow up on the 2 properties that you transferred to Bally's Master Lease 2. I'm just curious, can you talk a little bit about the 4-wall coverage of these 2 specific transferred properties compared to the other Bally's properties in your profile?

Actually, we do not receive individual property coverage. We only get it lease by lease. So there's really nothing I can add there. But as we move forward and reporting occurs, we will be updating you with where the 4-wall coverages in Bally's Master Lease 2.

I’m interested in the financial commitment for New York's downstate casinos. Do you have a projected budget for the total investment in each of the projects? Additionally, if you were to win both projects at the same time, do you have a preference or priority for either of the properties?

I think it's possible, but based on the recent news regarding Bally's, I'm uncertain if that project can move forward, at least given the current voting results. However, if the properties are built to the right size for the market, and we ensure there's sufficient coverage—specifically, significantly above 2x coverage on the new development, along with an adequate spread to our capital costs—I would feel comfortable considering any projects in New York and would be open to discussions. Our level of commitment varies with each project, and we are willing to engage in detailed discussions to help find solutions. That said, it’s uncertain where the funding will ultimately come from if these projects are awarded, and there is a considerable distance between our current position and the final financing stage.

It would be hard not to make money unless you overspend. I mean, you can do something collaterally stupid. But if you build to the market, as Steve highlighted, it would be a nice problem to have. But I think we have a realistic sense of what the prospects are there.

Our next question comes from the line of Daniel Guglielmo with Capital One Securities.

Based on state revenue data and operator commentary, regional gaming trends have been strong this quarter, do those positive trends change the way you think about your business as the owner of regional properties? Does risk appetite increase or the willingness to be more aggressive to go after deals, any commentary?

I don't think it makes us want to be more aggressive. We approach these situations in the same way regardless. Is there a suitable spread to our cost of capital? How secure is that property now and in the long term that we're going to be involved with? We do consider this with a long-term perspective. But overall, we're pleased. I've mentioned multiple times, and many of you are aware, that I consider gaming revenues to be resilient, and I maintain that position. They have proven to be resilient for many years throughout my experience in this industry. Therefore, we are pleased to see that these companies are performing very well.

And I would say, underwriting-wise, we don't look at one quarter, right? We look at history, go back 3, 4, 5 years to see how a property has performed. So one quarter wouldn't change our bullishness per se. But obviously, it helps the rent coverage that we would be looking at, at a point in time, but we even consider that in anything that we would bid on.

Yes, when considering the performance of PENN Entertainment, the company is excelling with its physical properties. While there were factors that impacted its stock value, these issues do not relate to the properties we own, which are performing exceptionally well, and we are pleased with that.

Great. Yes, I really appreciate all that color. And then this one is a little more high level. But do you think the focus for the stock has shifted too much towards what can go wrong instead of the positives and what can go right? And then on that, what are the team's goals for the second half of this year to maybe try and help shift that focus?

That’s a really good question, and I appreciate you asking it. I believe we aren’t getting enough recognition for the consistently positive things we’re doing here at the company. It seems like there’s more attention on potential issues rather than the opportunities ahead. Chicago does raise some questions, and Bally's credit also brings up valid concerns, which we acknowledge. However, we approach these projects on an individual basis and are confident that if everything goes as planned, things will be fine. We’re satisfied with our current position. Regarding development, we haven't exited the sale-leaseback sector at all. You can expect to see some transactions happening soon, hopefully before the year ends, which will clarify that matter. We’re also prepared to engage in ground-up development because it aligns with our expertise, and it opens up additional pathways we will pursue. Ultimately, our goal is to effectively use our capital in any viable manner.

Yes. I think some goals for the back half of the year would be to try to get one of these tribal transactions that Brandon mentioned earlier, try to get one of those over the line and announced, and obviously try to continue to expand our relationship with current tenants. I think there's opportunities to continue to do things. You've seen us announce things in the past with them with respect to their properties or expansion projects they've worked on. And I think we're going to continue to try to push those processes forward. And we're always out trying to create new tenant relationships. So I expect this to be very active through the rest of the year.

Our next question comes from the line of Rich Hightower with Barclays.

I believe many of my questions have already been addressed, but I appreciate the further insights on the Bally's 2 Master Lease, which were beneficial for everyone. More broadly, considering your role as a creditor to your tenants, particularly in the case of Bally's as a balance sheet-constrained operator, what value does a parent guarantee provide? I’m contemplating this in the context of iGaming and online sports, especially with states like Pennsylvania and Michigan showing notable growth. How does a parent guarantee factor in when total system revenues, including alternative gaming forms, could enhance the lease's security? I'm curious about how you view the various elements at play and how we should approach this situation.

There are several factors to consider regarding the parent guarantee. We prioritize assessing the parent guarantee but do not base our evaluations solely on it. While having a parent guarantee is beneficial and we see its importance, especially in supporting income from iGaming and other sources for our leased properties, we also scrutinize each property based on its individual performance. We evaluate our portfolio using a four-wall coverage approach. If the parent guarantee loses its value due to complications with the parent company, we concentrate on ensuring that our assets can be managed by other tenants, supported by sufficient coverage. We maintain a balance so that rent does not exceed revenue, avoiding weak leases. Our focus on markets like Chicago and Lincoln involves analyzing the asset quality, cash flow, and growth opportunities in the state, rather than solely depending on the parent guarantee. We acknowledge its significance, particularly as the parent generates more capital, making the guarantee valuable for supporting rent through increased revenues. However, we do not make it the foundation of our underwriting process.

Certainly. If a tenant has a 1.1x rent coverage but operates a valuable business outside our property that makes the parent guarantee appear strong, we wouldn't feel any more secure. There's a risk that they could return the keys because our asset might not be crucial to their overall operations. When evaluating, if their EBITDA matches our rent, they have a strong incentive to keep the business running despite external challenges. This is why the 4-wall coverage is vital; regardless of any difficulties a company faces, if the core business remains robust, that tenant or a new one will be interested in operating it.

Yes. I mean, just to sort of highlight something that you would remember well in the Apollo, TPG, Harris acquisition, I'd like to point out, I mean, the sponsors had a problem. But the properties were fine. They continue to operate, operate to this very day and did so profitably. So that's why we look at property by property as I think both Brandon and Steve have highlighted. We think that's where the value lies. Is this property worth what we're paying for it or exactly.

And I think on iGaming, we're keenly aware of the expansion of iGaming. We are in a state where iGaming was one of the first states to be introduced here in Pennsylvania prior to COVID. So we have many years of runway on iGaming here in Pennsylvania, and we own properties in Pennsylvania. And what we've seen is, has it had an impact on the growth of the bricks-and-mortar? Yes. It's impacted the growth, but it hasn't resulted in deterioration as far as we're seeing. And so you have a somewhat mature iGaming market here in Pennsylvania. The tenants that are participating in that market are getting fairly robust revenues from that source, but it isn't reaching a level where we are concerned about the viability of the bricks and mortar. And so we're cautious, but I think if you look at that as a data point, for us, it gives us a little, a little bit of comfort, but we still are very focused on the growth and proliferation of iGaming in different jurisdictions.

Very, very helpful, guys. I really appreciate it. I guess let me ask it another way, just to sort of put things in a vacuum. If you agree to shift 2 assets out of a master lease or whatever the arrangement was in order to cater to tenant's other creditors, what does GLPI get in return? And how should we think about that sort of more in isolation, if that's the right way to think about it?

I'm not sure I would necessarily agree with the characterization that we agreed to cater to the creditors. I think Bally's came to us with a proposed merger with Standard General, some of which we had a right to say yes or no to. Other pieces of it, we did not, under the terms of our legal documents with them. Their requests to move assets that are not generating income and keep them in the unrestricted group is something we agreed to as part of the overall transaction, and we were comfortable in doing so because of some of the things that Peter described, where we believe that the land side moves of those properties will generate a significant amount of additional EBITDA and revenue such that we're comfortable with those few properties being in an unrestricted group. So I would say that was at the request of our tenant. But we didn't feel as though on the whole, we were having any detriment in the quality of what we have.

Yes. And look, we have a relationship now with Bally's, we are good partners. And as a result, I think we feel very strongly that they're committed to us as we are to them as we are to all of our tenants as the sensible friendly source of financing as time goes on. So we think that we got a lot of benefit from that allowance.

Our next question comes from the line of Chad Beynon with Macquarie.

It seems that some of these large to land-based moves have shown strong returns. We heard this from one of your tenants last night on the earnings call, and we're excited to see PENN's upcoming opening here. Given that regional gaming revenues, especially in the second quarter, have been looking good and there are still opportunities out there, do you think the potential for these barge land-based moves will increase? Also, how do you see GLPI's funding opportunities participating in this potential growth?

I think it will grow there because I think states recognize that, look, the riverboats are in an antique state and we can all benefit from going land side. I think you're going to be quite excited about what PENN will do in Joliet and Aurora as well, I think it's going to be terrific. And again, I expect great results out of Baton Rouge for Bally's with The Belle. So I think that's a trend that's going to continue.

Yes. I think what you're seeing in regional gaming is the regional gamer values, the additional amenities that can be added by these landside moves. So when you're gaming on a boat, you have multilevel of gaming with low ceilings and stairs and other challenges. Amenities to the floor are difficult. So you bring these things land side and you add entertainment venues and a sports book and more food and beverage outlets, I think you're seeing a big lift in some of these things. So overall, I think these are good for regional gaming. And as we think about iGaming versus bricks and mortar, as these things turn into more entertainment destinations as opposed to just floating slots, I think it's a value add to our portfolio and to gaming in general.

Plus, PENN is investing in other bricks-and-mortar amenities, hotels in Columbus, an expansion that they've all needed at the end. So there's some pretty cool stuff happening that we think will prove to be very successful.

Yes, so I think you said it perfectly, I would only add that, the demand coming from new guests on these opportunities to try and add to that pie and create a further demand. So that's definitely the trend we're capturing. And I do think you're right. And to the extent that states continue to embrace this, it's only good for all of us.

Great. And then just in terms of international opportunities. I know this quarter, we saw a record-setting EBITDA result from a company that's in a pretty good position in Singapore, so not specifically looking at Singapore, but it sounds like international EBITDA for this industry still has a long way to grow. So what's your appetite at this point to look outside of United States and Canada?

Yes, we've looked at things in the past and whether it be South America or Australia, we've looked at some European things. But I think the reality is it all comes back to what the tax treaties are and how you bring the money back and what that costs you because the REIT is an IRS tax code, and therefore, we don't get the same tax benefits in some jurisdictions. So we have to consider that with respect to our cost of capital when we look at anything and the same in Canada. So that's just an extra amount of diligence that goes into looking at anything, but we're clearly open to entertaining the idea, but at this point, I'd say we're a little more focused on the U.S. and the tribal aspects.

Yes. And to be clear, we have looked at a number of things over time that just again, never found anything that worked for us.

Our next question comes from the line of David Katz with Jefferies.

I wanted to revisit the gaming segment and ask Steve a question. We're noticing that many opportunities are emerging from current tenants. During our discussions, it seems there is a noticeable divide regarding operators who are open to being tenants versus those who aren't. In your experience, do you encounter operators or potential tenants who seem uncertain? In other words, is there a potential pipeline of new tenants in the land-based gaming sector that we might expect to see in the next 3 to 5 years?

Yes, thank you, David. The important part of your question was about the 3 to 5 years. It's not strictly 5 years, but considering the next 12 months, we need to find a way to convince sole proprietors to let go of their ownership of real estate and possibly exit entirely. You’re correct that there is a spectrum of opinions ranging from interest to unfamiliarity with the concept. Over time, I believe this hesitance will diminish. The gaming non-current REIT tenants mainly consist of sole proprietors and family-owned businesses, which are quite numerous. We need to build their understanding and comfort, which requires time. We are seeing progress. If you had posed this question three years ago, we probably wouldn’t have anticipated that Cordish would sell their real estate and transition to being a tenant. Yet, they did, and they're very pleased with the change and actively promoting it. They've also spoken with other tenants on our list who are now considering this shift. As we move ahead, there’s a continued chance to win over individual operators. They need to be open to the idea, seeking the right solutions, and we must establish strong relationships to position ourselves as the solution provider.

Yes, David, as you've seen, this industry places a high value on relationships. We dedicate substantial time at GLPI to nurturing both new and existing connections, and we don't take any of this for granted. As Steve mentioned, we sometimes operate in parallel paths since people are out engaging with others to demonstrate our interest. We are not pressuring anyone, but we believe that when the right moment arises for some of these proprietors to consider monetizing their assets, GLPI will be top of mind for them. Building these relationships over time is essential, and we think we do a solid job in that regard.

Yes. Look, I've said for many, many years. People do business with people of their choice and with the benefits that I think the sale-leaseback arrangement offers is something that people have to come around to. And I think Steve's answer and Brandon's answer were as perfect as they could get, frankly. Lots of opportunity here.

Our next question comes from the line of Smedes Rose with Citi.

You've obviously covered a lot of territory here. But I just wanted to ask you one question on the development of the ballpark in Las Vegas. Is there any kind of update there? And maybe any change around your thinking in terms of your commitments to the Bally's kind of casino hotel that, I guess, eventually will be built there as well?

There's a lot of finger pointing at the table here as to who wants to take that. Well, we have an answer. Brandon, we'll look at you. Yes, you take it.

There's been a good amount of activity recently. We're really excited about the developments at the site. Just to note, Steve and I attended the groundbreaking a few weeks ago, and the atmosphere in that town is electric, with enthusiasm from the LVCVA, the County Commission, and local businesses. There's a lot of anticipation surrounding what the A's will contribute to Las Vegas. We are collaborating with Bally's on the remainder of the site and exploring how a resort with entertainment, gaming, and retail can enhance what the A's are offering. Bally's is nearing a more finalized plan, which they've shared with us and several local officials, generating a lot of positive interest. Regarding our investment in the site, we’ve pledged $150 million to $175 million, with $50 million already spent on demolition, leaving $125 million remaining. We are dedicated to funding that amount, although its specific allocation within the site is still being negotiated as we have certain interests we would like to secure. There are various options available, and as we finalize the financing and development of the site along with the amenities and third-party vendors involved, we may consider increasing our investment at that time. Bally's will need to determine how they wish to finance the site, and if they don’t require additional funding from us, that's acceptable as well. Overall, there is a lot of enthusiasm about the site and the positive impact it will have on that part of Las Vegas.

Yes. I think, did a good thing in connecting Bally's with the Marnell organization, who have done a terrific job of planning out the balance of the site. But I think Brandon is correct. What happens next is going to be in Bally's court, and we stand by encouraging, but the final script has not been written. Maybe suffice it to say, we're not going to do anything stupid. We're not going to jump off any bridges.

Our last question comes from the line of Greg McGinniss with Scotiabank.

In the discussions with PENN on their request for the $130 million on Joliet, do those conversations also touch on the other potential investments? And I understand that these items won't be included in guidance until there's a signed agreement. But what's your confidence that they could call on that, what could be up to $600 million in additional funding?

The $225 million for Aurora is a definite obligation that GLPI has, so I can confirm that will happen. The only two remaining projects are the M and the Columbus hotel, and those will depend on PENN requesting our funding.

I just wanted to clarify on the Bally's proposal. Did you have a $2.5 billion commitment from GLPI if they obtain one of the licenses?

There is a piece of paper from GLPI indicating that we would consider a commitment. We would consider committing financing to owning land and funding building improvements, depending on due diligence, where the licenses are awarded, and various other terms and conditions that have yet to be discussed or determined.

I think globally, I would think about it like this, the downstate licenses present a tremendous potential opportunity. And we would like to be a part of those opportunities should we have counterparties that would like for us to be a part of those opportunities. I think the Bally's script at that location is largely unwritten, right? We haven't seen plans and specs and budget and all the kinds of things that would be required for GLPI to commit a fixed dollar amount to that site. We're supportive of Bally's. We're supportive of the project. Just like Steve said, we will probably be supportive of many other projects in downstate New York. Do we think $12 billion is the right number? Probably not. Is $2 billion the right number? That may be great. I think it all depends on how these unfold. And all I think you're seeing is that GLPI has indicated a willingness to use our balance sheet to fund what we think will be very accretive cash flow in downstate New York under the right circumstances.

Any other comment from around the table? Do you want to do that, Steve?

Yes, a little discussion around the table about some statistics and information around the Chicago project. I think we'll wait until we issue a press release around that issue, just to bring people up to date and to be highly transparent with what's going on at that site and with that project. So stay tuned, we'll get something out to you.

So with that, I thank you all for dialing in today. We're kind of happy with where we are except for, I think, our stock price. But that aside, we're doing fine. So thank you. See you next quarter.

Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.