Gaming & Leisure Properties, Inc. Q1 FY2026 Earnings Call

Greetings. Welcome to Gaming and Leisure Properties, Inc. First Quarter 2026 Earnings Conference Call and Webcast. Please note, this conference is being recorded. At this time, I'll now turn the conference over to Joe Jaffoni with Investor Relations. Thank you, Joe. You may begin.

Thank you, Rob, and good morning, everyone, and thank you for joining Gaming and Leisure Properties' first quarter 2026 earnings call and webcast. The press release distributed yesterday afternoon is available on the Investor Relations section of our website at www.glpropinc.com. In addition to the press release, GLPI also posted a supplemental earnings presentation, which highlights the events of the quarter. Recent developments and future considerations can be accessed at 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 Form 10-Q and in the earnings release as well as 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 on today's call are Brandon Moore, President and Chief Operating Officer; Desiree Burke, Chief Financial Officer and Treasurer; Steve Ladany, Senior Vice President and Chief Development Officer; and Carlos Cantrell, Senior Vice President, Corporate Strategy and Investor Relations. Thank you for your patience with that. It's now my pleasure to turn the call over to Peter Carlino. Peter, please go ahead.

Well, thank you, Joe. Happy to be here this morning and always a lot more fun to make these calls when things are looking good, and we've had a terrific quarter. Our AFFO and AFFO per share both grew in the mid- to high-single digits through this first quarter. As we entered 2026, we sit in a very enviable position with a clear and well-documented line of sight toward very healthy multiyear AFFO growth both in our acquisition and development pipelines. With the acquisition of Bally's Lincoln in February as well as progress on several of our development projects, our future capital commitments stand at roughly $1.8 billion, nearly all of which we expect to deploy by year-end 2027. Despite what was a relatively challenging year in the regional gaming markets, 2026 has gotten off to a very solid start and our rent coverage remained strong with the vast majority of our leases covered at 1.8x or higher. We feel pretty good about the opportunity that exists in the market today. We remain active and feel good about our balance sheet and our ability to transact in an accretive manner. As I've offered many times over the years, I would remind you that there is no transaction that we have to do; we are never pressured just to do something new. I used to say over at PENN National, even though our customers may be in the gambling business, we are not. So our focus remains on thoughtful transaction underwriting and careful capital deployment, looking always at the health of our balance sheet and continuing to position the company for multiyear AFFO and dividend growth. So with that, I'll turn this over to Des.

Thanks, Peter. For the first quarter of 2026, our total income from real estate exceeded the first quarter of 2025 by over $24 million. This growth was driven by approximately $33 million in cash rent increases resulting from acquisitions and transformations. For Bally's, the acquisition of Bally's real estate increased rent by $7.5 million. The Chicago lease increased cash income by $5.5 million and the Bally's Baton Rouge development increased cash rent by $2.6 million. For PENN, Hollywood Joliet funding increased cash income by $5.4 million and another PENN property increased cash income by $3.8 million. The Dry Creek, Ione and Cordish Virginia loan increased cash income by $3.5 million. And then the recognition of escalators and percentage rent adjustments on our leases added approximately $4.6 million. In addition, the combination of our noncash revenue growth steps, investment in lease adjustments and straight-line rent adjustments partially offset these increases, resulting in a collective year-over-year decrease of $8 million for the noncash items. Our operating expenses decreased by $49.8 million, mainly due to the noncash adjustments in the provision for credit losses. Included in today's release is our full year 2026 AFFO guidance of between $1.212 billion and $1.223 billion or $4.08 to $4.12 per diluted share in OP units. The guidance does not include the impact of future transactions. However, we did include additional development funding of approximately $590 million to $640 million, which will be funded relatively evenly by quarter throughout the remainder of 2026, bringing our total development spend between $750 million to $800 million for 2026 full year. The acquisition of PENN's Aurora facility for $225 million is also included in our guidance, and we expect that late in the second quarter. And the anticipated settlement of $363 million of our forward equity is also still expected on June 1st. From a balance sheet perspective, our leverage ratio was at 5x, at the low end of our target level. Given our balance sheet position, our seven-year runway to fund our development projects and our annual free cash flow over that time frame, we have optionality to fund our accretive commitments. As a reminder, our significant development projects do pay us cash rent upon funding. And with that, I'll turn it back to Peter.

And with that, I'll ask the operator, would you open the call to questions?

And our first question is from the line of Anthony Paolone with JPMorgan.

Maybe can you start with talking a bit more about what your investment pipeline looks like, how it feels in terms of what you're seeing out there, yields, all those various dynamics?

Well, the pipeline that is outlined and disclosed is clear. Assuming you're asking about what we're seeing behind the scenes that we've not yet announced, I'd say we're having a very active dialogue on a number of fronts. The marketplace continues to be very productive. It ranges from large-scale divestiture portfolios coming out of strategic decisions or M&A-type processes all the way to smaller, tactical discussions we continue to have. So there are a number of fronts and very active dialogues. As far as cap rates, since you brought that up, I think the market is normalizing in an area that's accretive to us. I don't think the 7.5% cap rates that have been previously printed in the not-so-distant past are indicative of what you will see going forward. I think the market has normalized some. Credit markets continue to be somewhat turbulent for the gaming operators. Therefore, I think the realization of where cap rates probably play out to our benefit is more indicative of the 8% area that you saw Lincoln done and some of the other transactions we've announced more recently.

Okay. And then my second one, as we look to 2026, is there a sense or can you give us a sense as to which of the leases may not see bumps in 2026 because coverage falls below maybe the 1.8x? I'm just trying to get a sense as to where we should assume a bump versus not.

The only lease that we currently do not expect escalation on would be the Pinnacle lease. We do have percentage rent adjustments that are coming in on the Pinnacle leases as well as a few other leases, and that should be a small decrease for 2026. I think we talked about that last quarter; it's below $4 million for a full year, but we would only see about half of that this year. That is baked into our guidance, and that is just an estimate at this point.

Our next question is from the line of Ronald Kamdem with Morgan Stanley.

This is Jenny on for Ron. First on development funding: you raised your 2026 guidance to $750 million to $800 million. Can you walk us through what drives that increase? What projects may be moving faster than expected?

Sure. We raised the guidance by about $150 million on the high end for the full year. That's mainly due to our Chicago project where we have greater visibility and a clear spend cadence as the project has progressed and the podium has topped off. It does not mean that we're changing timing of when we think the properties may open; it's just the timing of our spend is coming in quicker than what we had originally anticipated.

Jenny, the only thing I'll add there is that in Chicago they will be topping out both the podium and the tower next week. So we're pretty pleased with the progress there and still on track for a first half 2027 opening.

We're always talking about that putting money out that gets current interest is a happy experience. So that's a very positive event for us.

That's exciting. I think the second question maybe on Live Petersburg or Life Virginia—I think you bought the land in the first quarter. Maybe talk a little bit more on the expected timing for the remaining funding to start in the second half of 2026 and more details on the timing of funding and the first construction draw would be great.

Yes. That is included in our guidance, and that is included in the $590 million to $640 million for the remainder of the year. We haven't provided specific month-by-month guidance by project, so I don't have more granularity to add to that question at this time.

And Jenny, just as a reminder, the structure that we have for the Cordish deal is a little bit different than we had for the Chicago transaction and our other development projects where the Cordish equity dollars are all being spent first. So I think we'll get better visibility into this as the Cordish money goes in and the development gets underway.

The next question is from the line of Steven Pizzella with Deutsche Bank.

First, obviously, there's a lot in the pipeline that you covered. But can you share your insights into some of the performance of the recent development openings?

Yes. Look, it's been pretty productive here over the last 6 to 12 months. If you go all the way back to Hollywood Joliet, as you heard from PENN yesterday, I think they're very pleased with the early returns there; it has clearly been incredibly additive relative to the prior facility. Live Petersburg, the Cordish development in Virginia, opened on January 22nd. That has been incredibly strong, doing a little bit over $15 million a month in each of the two months that it's been open. So from an indication standpoint, it is shaping up to be a very good market for that permanent development. The other project that we opened from a development standpoint in December of 2025 was Bally's Baton Rouge. The story there is similar: market expansion driven by the new supply and incremental investment. Those data points give us a lot of comfort for some of the things we're doing on a go-forward basis.

Okay. Very helpful.

And as Peter mentioned, if you listened to PENN's call yesterday, the hotel expansion has been very well received. They're outperforming in that market and appear to be taking some share due to that expansion and capital investment.

I'll also add we opened in February our first tribal investment with Ione, which had a very strong opening. That appears to have grown that market. So we are positively inclined by the first set of development projects that have come online and the general performance out of those facilities.

Okay. Great. Very helpful. And then just a bigger picture question, if I may. How do you value protections and the long-term relevance of the site versus potential free cash flow of an asset or the free cash flow conversion?

Sorry, Steve, I think you might have cut out for a little bit there. Could you just repeat that?

Just asking how you value location of the real estate compared to protections and the long-term relevance of the site versus potential free cash flow — basically, do you value free cash flow conversion higher than site-location protections?

We really do value it on a free cash flow basis. We look at the competition in that location, drive times, how we think that location will perform over the long run and what kinds of risks there are in the future. Then we derive what we think the fair coverage would be on a property, and it's all cash flow generated rather than value of land and building.

I think the location helps you get better visibility into the cash flow. As Desiree said, we value off cash flow. The location can be quite sticky because these assets are licensed; the site isn't something you can just move across the street. So we do focus on location, but primarily we focus on valuing the cash flow.

Our next question is from the line of John Kilichowski with Wells Fargo.

I'd like to start, Peter, I hope you're well and your back is feeling better. My first question is on the Caesars master lease, which had a pretty sizable move down in coverage this quarter. Can you give us any color on what's going on with those assets? Maybe any green shoots that might show a bottoming in coverage for the rest of the year?

Yes, John, this is Carlos. I think you might have conflated two things with respect to the master leases. If you're asking about Bally's, we pointed out at the time of the Twin River Lincoln acquisition that the pro forma coverage for that lease was going to be a robust 2.2x after the addition of Lincoln. With respect to Caesars, coverage for the master lease went to 1.59x in the quarter, which we view as still solid coverage. We have a strong relationship with Caesars' management. There were some items in the fourth quarter that negatively impacted results, including some hold in Atlantic City and West Tower room renovations at a property there. So we feel good that we have our hands around that situation, and at almost 1.6x, it's a pretty solid coverage.

Thanks. And then one more: the City of Chicago is talking about moving ahead with video gambling and Bally's mentioned an impact to the business. I'm curious how that may impact Bally's Chicago around rent or coverage?

We did underwrite the VLT possibility in Chicago. So it does impact rent coverage, but it was underwritten in determining the $940 million that we were willing to provide to Bally's for that project. I can't give you exact numbers as to how it will impact coverage, but the potential VLT legislation shouldn't have an unanticipated impact since we underwrote that possibility.

All the sweepstakes activity that exists today in Cook County is notable, so the question of whether VGTs will have a significant impact on bricks-and-mortar gaming is open. We know there will be some impact, and as Desiree said, we underwrote VGTs in Cook County as a possibility. We also underwrote the case if Hawthorne had a full gaming facility. Our underwriting in Chicago is fairly conservative. While we would prefer VGTs not to be in Cook County, we don't view that as overly adverse to what we underwrote for the project.

Our next question is from the line of Greg McGinniss with Scotiabank.

Given some of the challenges we've seen across gaming this year, how do you see operators responding? What are your thoughts on rent coverage in 2026? And does it change the nature of the conversations you're having with casino owners in terms of types of deals they're looking for?

Greg, we've been incredibly encouraged with what we've seen in the first four months across the regional gaming footprint this year. You saw very solid earnings from PENN, strong results from Boyd in the Midwest and South region, and Churchill earlier in the week was solid as well. What we're seeing from a regional perspective has been encouraging after a period in 2025 where the industry digested very strong comparisons. Our rent coverages remain in an incredibly solid place, and we do believe what we've seen early in this year is encouraging for regional gaming.

I think one thing that's become more apparent is that operators and developers who will be paying rent are significantly more focused on ensuring a level of cushion and higher rent coverage starting out of the gate. In the past the market may have been more casual with respect to starting points on rent coverage; now, due to recent struggles at some assets, portfolios or assets with extra cushion on coverage have retained value, whereas assets with significantly lower coverage have struggled. So folks are focused on starting with higher rent coverage out of the gate.

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

There's been a lot of investor concern about prediction markets and the impact on gaming. How do you view that? Is that something you think about when underwriting new projects?

We lump prediction markets in with iGaming from an underwriting perspective. iGaming has a more specific regulatory path at the state level, while prediction markets remain largely unregulated federally and lightly regulated in many states. There are challenges for prediction markets right now. While we're monitoring them closely, we aren't overly concerned at the moment given the difficulties and lack of legislative traction across many states. I don't think the proliferation of iGaming is going to accelerate industry change this session, which is positive overall. We'll keep an eye on predictive markets, but we don't view them as a pressing threat today.

Got it. And then on Rockford, that loan is coming up for the initial maturity date soon. Do you expect that to be extended? What do you think happens ultimately—does it get paid off or maybe converted into ownership of the improvements?

For Rockford, we've begun discussions with the relevant parties, but we haven't made a final determination on what we're going to do with that one at this point.

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

There's been a lot of discussion about Caesars potentially going private and that has led to questions around changes at the corporate level. In terms of your leases, can you talk about how durable they are—do they attach going forward or could they be gotten out of if someone wanted to do that?

It depends on the structure of the transaction. Generally, our leases have concepts around discretionary or qualified transfers. For a transfer to be done without our consent, certain things have to be true including pro forma leverage and the existence of a replacement parent guarantee. We don't have enough visibility into the potential structure of any Caesars transaction to determine if a consent would be required. If a consent is required, we'll do what's in the best interest of our shareholders. At the moment, it's TBD. We have a close relationship with Caesars' management and, overall, we view the proposed transaction as neutral to us; it could be positive in certain outcomes, but we don't have enough information yet to say definitively how it will impact our leases.

Okay, fair enough. Bigger picture: do owners you're speaking with have other sources of capital readily available, or has that become more scarce over the last several quarters in terms of competitors or traditional lending?

There's a divide—some parties struggle to find inexpensive capital that is easily accessible based on circumstances like leverage, operational profile or size. Larger operators and larger private owners generally have access to capital. It comes down to strategic decision-making whether to do a sale-leaseback versus a bank loan or bond. The dialogue depends on the counterparty: some have access and others do not.

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

Peter, great to have you back. One question on Bally's: they appear to be looking to do more M&A, including large deals internationally. Does that influence how you think about future deals and underwriting with them?

Our approach is unchanged: we underwrite deals at the property level. The Bally's Lincoln transaction was accretive and attractive on its property-level metrics. International activity by Bally's is a corporate capital allocation decision; our focus is on the property-level agreements we have with Bally's and their ability to execute on projects such as Chicago. At the moment we aren't concerned about Bally's ability to fund and complete Chicago.

Understood. And as a follow-up, any updated thoughts on international or non-gaming opportunities and where that ranks in your opportunity set?

On the international front, we've had conversations as recently as last quarter. There are tax, repatriation and legal/customs considerations depending on the jurisdiction, and those aspects matter. We continue to look, but I wouldn't tell you we're getting comfortable enough to do something international soon. We're focused on opportunities that equate to accretive transactions for us in the United States given the tax implications of bringing money back.

That answer applies to non-gaming as well. We look at a lot of things—'we kiss a lot of frogs'—but we're still looking for the right fit in non-gaming, too.

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

Brandon, can you talk a bit more about the normalizing cap rates you discussed—what's driving that specifically? In your comments it sounded like about a 50 basis point change—would that be the right range to quantify what you're seeing?

I'll let Steve address the detail, but generally what's led to the normalization is a lot of market data coming to bear—and transactions that help establish marketplace norms. We have many data points and feel we have a good sense of where market clearing cap rates are today. Steve will add more context.

Todd, I wasn't trying to peg a precise 50 basis points. Each transaction and negotiation is different. My point is that if you asked where the average market-clearing regional gaming asset sale-leaseback would clear today, I think it would be in the 8% area rather than the 7% area. I'm not trying to be hyper-precise; it's more that the market has trended to that general area. It could pivot in six months, but for now that's where the market appears to be. We would obviously anticipate that our implied cap rates would tighten as the market tightens.

Okay, thanks. Desiree, I had a question about the guidance adjustment. Nominal AFFO increased about $30 million at the midpoint, which seems to be mostly related to higher capital deployment. You mentioned Chicago, but were there other changes around earlier cadence of funding having an impact or anything else driving that change?

Yes. It's mainly due to the funding changes because that increases income. There's an offsetting impact in interest expense. On the high end, we did see some increase in interest rates this quarter, so some benefit is eaten up by higher interest expense assumptions in the high end of our guidance. There's also some rounding in the per-share math. But overall the change is driven primarily by earlier or faster funding, particularly in Chicago.

Okay, that's helpful. Did anything change in terms of G&A and stock-based comp assumptions for the reconciliation?

Not at all.

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

Desiree, can you talk a bit more about the positioning of the balance sheet in the current macro environment? You outlined roughly $1.8 billion of capital deployment over the next 18 months and leverage today is at the low end of your target. How are you thinking about balance sheet management over the next 18 months and the need for new equity?

We sit here today with $275 million of cash that has not been deployed into our run rate at 5x. As that becomes income-earning, the leverage ratio will not increase for that portion or for the $363 million of forward equity that we have outstanding. We also have free cash flow in the range of $230 million per year. So the majority of funding for this year is still coming from internally generated cash and the previously mentioned forward equity. The remaining funding can be done by debt or equity depending on market conditions, but even with the full funding of the remaining $1.8 billion and giving credit for the AFFO those transactions will derive, we expect to still be at the low end of our 5 to 5.5x leverage guidance.

Got it. And more broadly, the growth for this year is mid-single digit and next year similar. Is this sustainable beyond the next two years? How are you thinking about the sustainability of long-term cash flow growth from the portfolio?

I can clearly see through 2027 and see growth there and into 2028 based on current commitments. Beyond that, it depends on which transactions we complete over the next year or two. We will have growth related to contractual escalators on our leases, but outside of that, until we do additional accretive transactions, I can't predict 2028 and beyond with certainty.

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

I want to revisit the potential Caesars deal and how it might affect GLPI. There's a parent guarantee in place on your master lease. What's your legal understanding of the ability of the parent guarantee to travel with the lease under a variety of potential deal structures? How should we think about that from the outside?

You should think of the parent guarantee as one of the requirements that has to be in place for a transfer to meet the definition of a qualified or discretionary transfer. For a transfer without our consent to be valid, certain conditions must be true, including pro forma leverage and the existence of a replacement parent guarantee. We don't have enough information on the anticipated structure of any Caesars transaction to determine whether a parent guarantee would be at an entity level that meets our lease requirements and would be acceptable to us. But if it is structured appropriately, you should assume the parent guarantee could travel with the new tenant.

Got it. Also, are you seeing other capital providers—particularly private credit—pull back from the market? Does that imply anything about GLPI's ability to step in as a capital provider to projects or affect market pricing for capital?

To date, we haven't seen a major pullback from private credit providers at the early stages. They appear engaged in the early innings of transactions. There are some parties that have dipped toes in and pulled back, and certain funds have had challenges, but generally the same set of players continue to look at transactions. Relationships and underwriting matter; those who have both tend to be more successful. We expect to have a seat at every table and to continue to be competitive.

In the case of New York, that's a unique market with a lot of interest. Valleys, for example, has many capital sources in discussions. Whether we have an opportunity there will be relationship-driven more than purely economic. We won't pursue transactions at cap rates that would be dilutive or not accretive to our shareholders.

Our next question is from the line of Chris Darling with Green Street.

With Acorn Ridge now open, have you had any discussion around converting the loan into a formal lease structure? Separately, whether it's Acorn Ridge or any other tribal investment, can you talk about your level of visibility into the underlying financial performance of those properties and the regular cadence of updates?

The Acorn Ridge loan has a five-year term with a two six-month extension option. We're not in discussions about converting it to a lease at this point. As far as performance, we get quarterly certifications which include coverage ratios, at least as far as how it will cover our interest payments. We'll be monitoring operational stability and cash generation via those quarterly reports.

We have ongoing dialogue with the tribal leadership and they've been thoughtful: get six months of operations under your belt and then we'll reevaluate. We're supportive and are looking forward to further discussion as they review their plans.

As you underwrite tribal investments, are there jurisdictions that are more or less attractive to you?

Different jurisdictions lead to different opportunities. California, for example, has many tribes and significant market size even though compacts and tax structures are different from state to state. It's more relationship-driven—we're getting a lot of inbound interest and have many opportunities to evaluate; it's not driven solely by state lines but by the specifics of each opportunity and how it fits our underwriting.

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

Do you have a minimum dollar size for redevelopment projects that you'd be willing to fund? It feels like operator CapEx budgets are down for 2026 versus 2025, but improving properties has been working. Are smaller, less invasive projects at more properties coming?

We don't have a strict minimum dollar size. We would fund projects of varying sizes if the tenant believes the project will be accretive to them and generates pro forma business that surpasses the cost of capital. We want to be supportive of tenants where the capital drives incremental cash flow.

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

You have differentiated yourself with a regional focus versus destination. Some operators are improving margins this year. Does that validation of your thesis dissuade you from leaning into Las Vegas, or will you double down on your current drive-to regional thesis?

I don't think we've ever leaned into Las Vegas as a focus. We've always looked at projects case-by-case and location matters, but we have no special focus on Las Vegas. The regional market has been an area of strength for many years and has historically been a safer place to put capital. Recent events in Las Vegas highlight that where we put capital often makes more sense in regional markets.

It's the strength and safety of the cash flows that matter, not just geography. The regional business has delivered a lot of stability over time. First quarter performance has been a nice indicator that things are strengthening in regionals.

We saw regional properties hold up better coming out of the financial crisis and out of COVID compared to Las Vegas; that trend continues. The regional thesis has been validated by those outcomes.

A follow-up on Atlantic City: operators down there are concerned about what could happen with New York. Is that a market that could recover with capital? Would you be interested in helping operators down there with redevelopment or strategy shifts?

Atlantic City faces risks given what's possible in New York. If New Jersey doesn't respond in North Jersey, we could see business shift to New York properties. It's not a market that's currently looking for more investment in general. There will always be winners, but it's not an area where we see a lot of upside today.

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

When we look at the market for regional properties today, the competitive set is small—yourself and a handful of others. Are you seeing a change in competitiveness today versus 6 to 12 months ago, given expectations that more assets might come to market?

To be honest, I think there are fewer competitors right now. Some players dipped into the market and then decided it wasn't for them or had issues. There's a lot of complexity in regional portfolios—different assets, operators and competitive landscapes—which makes it harder for newcomers. Right now there are probably three to five parties that will seriously consider a larger portfolio, and likely the same three will put in indications when something material comes to market.

Next question is from the line of Robin Farley with UBS.

Speaking of not leaning into Las Vegas, can you update us on potential timing or your latest thoughts on opportunity for you at that site?

The stadium and concourse are progressing nicely. The concourse level is up and they'll likely put on the first roof cuts in the next six weeks. The integrated resort was always planned to follow the concourse construction. We have $125 million of commitment remaining. Whether we expand that commitment will be determined as leasing fills out and we get a clearer picture of revenue generation. We and Bally's will discuss whether additional GLPI investment above the $125 million is appropriate. We expect more clarity in the next six months.

Our final question is from the line of John DeCree with CBRE.

From your perspective, is there a market today for large portfolio transactions? Would you consider anything that might come to market even if it's very chunky?

It depends on structure—whether the assets would roll into an existing master lease or be structured differently. There may be assets that are too small to be efficient for us but if something is accretive and fits our underwriting we would consider it. We've done large deals in the past—Pinnacle was roughly $4 billion—so there's no absolute number that's too large if it's accretive to shareholders.

So if there's a multibillion-dollar transaction unrelated to Caesars, would that be in your wheelhouse?

Yes. If it's accretive, we would evaluate it. We would underwrite it against our cost of capital at the time and if it was a smart use of capital we would consider a large portfolio.

I've always felt there's never a shortage of capital for a good deal. We'll always look at opportunities both large and small; we'll swing for singles and occasionally go for a bigger play when the spread is worthwhile.

At this time, I'll turn the floor back to Peter Carlino for closing comments.

Okay. Well, with that, I think the morning has been productive from our point of view. We thank you for tuning in today. See you next quarter. Thanks very much.

This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.