Gaming and Leisure Properties Q2 Earnings Call Highlights

Key Points

• Second-quarter performance strengthened: GLPI reported a 10% year-over-year increase in AFFO, driven by acquisitions, lease escalators and development funding. The company raised its quarterly dividend 5% to $0.82 per share.
• 2026 outlook remains positive: GLPI guided to AFFO of $1.219 billion to $1.225 billion, or $4.10 to $4.12 per share, including $400 million to $450 million of expected development funding over the next two quarters.
• Growth pipeline is active but selective: Management highlighted projects involving Bally’s, Penn Entertainment and other regional gaming operators, while remaining cautious about high-cost financing, early-stage projects and competitive acquisitions.

Gaming and Leisure Properties NASDAQ: GLPI reported second-quarter 2026 growth in adjusted funds from operations, or AFFO, as acquisitions, lease escalators and development funding increased cash income. Chairman and Chief Executive Officer Peter Carlino said AFFO rose 10% from a year earlier and described the company’s near- and medium-term growth pipeline as highly visible.

Carlino said the regional gaming market remained strong despite concerns expressed elsewhere about the sector’s outlook. He said GLPI’s tenants were seeing same-store growth and attractive returns on investments in new properties and expansions. The company also raised its quarterly dividend 5% to $0.82 per share, bringing its three-year compounded dividend growth rate to 4.4%, according to Carlino.

“We can finance everything that we’ve got announced with what we have available today,” Carlino said, adding that the company did not need to access capital markets if it chose not to do so.

Income growth and guidance

Chief Financial Officer and Treasurer Desiree Burke said total income from real estate exceeded the prior-year second quarter by more than $35 million. Cash income increased by about $43 million, driven by acquisitions and contractual escalations.

Among the principal contributors were GLPI’s acquisition of Bally’s Lincoln real estate, which added $14 million of cash income; the Bally’s Chicago lease, which contributed $9 million; and the Belle development project, which added $2.4 million. Funding for Penn Entertainment projects in Joliet, Aurora and at M Resort collectively added $5.8 million, while the Sunland Park acquisition contributed $3.8 million.

Loans associated with Dry Creek, Ione and Cordish Virginia added $4 million of cash income, Burke said. Lease escalators and percentage-rent adjustments provided an additional approximately $4 million. Non-cash items, including revenue gross-ups, investment and lease adjustments, and straight-line rent adjustments, reduced income by $7.2 million.

Operating expenses declined by $54 million, mainly because of non-cash adjustments and the provision for credit losses, Burke said.

GLPI guided to 2026 AFFO of $1.219 billion to $1.225 billion, or $4.10 to $4.12 per diluted share and operating partnership unit. The guidance excludes potential future transactions but includes an estimated $400 million to $450 million of additional development funding expected to be deployed relatively evenly over the next two quarters. That would bring total projected development spending to $750 million to $800 million, unchanged from the prior quarter’s forecast.

The company’s leverage ratio stood at 4.8 times, below its stated target range of five to 5.5 times. GLPI also settled a forward contract, issuing 7.6 million shares and generating net proceeds of $351 million.

Development pipeline and financing

Burke said the development-funding guidance includes Bally’s Chicago, Ione, Dry Creek and Live! Virginia projects. The range reflects uncertainty over the timing of when project sponsors will request funding, rather than changes to the company’s overall commitments.

Management said higher borrowing costs can raise GLPI’s own cost of debt and influence the pricing of future transactions. However, Chief Development Officer Steve Ladany said rising financing costs for casino operators may also encourage them to consider alternative capital sources.

Regarding the Las Vegas stadium site, President and Chief Operating Officer Brandon Moore said the timing of GLPI’s remaining $125 million commitment remains uncertain. He said the Athletics’ stadium construction was progressing and that Bally’s was developing plans for infrastructure supporting the venue, including accessways, a podium and utility conduits. GLPI may evaluate further investment in that infrastructure but has not committed to fund more than $125 million.

Moore said GLPI remains interested in Bally’s New York opportunity but does not believe it makes sense for the REIT to participate in the project’s early financing stages at its current cost of capital. GLPI has a right of first refusal on certain aspects of the project and intends to remain involved as the development and its financing plans advance.

M&A activity and regional gaming outlook

Management discussed recent announcements involving potential take-private transactions among gaming operators. Carlo Santarelli, senior vice president of corporate strategy and investor relations, said the developments supported GLPI’s view that gaming operators have been undervalued in public markets. Caesars represents about 7% of GLPI’s cash rent, while GLPI has no relationship with MGM, he said.

Ladany said GLPI was not assuming that meaningful divestitures or derivative acquisition opportunities would result from those transactions, but the company would be receptive to discussions. He also said GLPI was aware of Churchill Downs’ process to explore sales of most of its gaming assets and expects to evaluate any broader sale process.

Management said its underwriting process for transactions continues to emphasize long-term operating stability, tenant credit quality, competitive conditions, diversification and lease structure. Carlino said the company would not pursue transactions simply to win competitive auctions.

GLPI also said it remains engaged in discussions with tribal gaming operators regarding development financing, refinancings and other potential uses of capital. Moore cautioned that tribal transactions can move slowly and that the timing of any potential deals is uncertain, but said the company expects future activity in the sector if it can resolve remaining hurdles.

Online gaming and capital investment

On online gaming legalization, Moore said GLPI sees legislative activity in Virginia, Maryland and Indiana but believes most states remain cautious about expanding internet gaming. He said the presence of online gaming has slowed growth in brick-and-mortar casino operations in Pennsylvania but has not impaired tenants’ ability or willingness to pay rent.

Management said capital improvements have produced strong returns in several regional markets. Executives cited Boyd Gaming’s Treasure Chest project, Penn’s recent investments, Live! Virginia’s temporary facility and the Belle redevelopment in Baton Rouge. Carlino said the Belle project transformed two existing properties and expanded demand in what had been considered a stable, established market.

Moore said GLPI continues to view its rent-coverage approach as validated by the resilience of regional gaming through changing economic conditions. The company said tenants have increased capital spending in some cases, particularly Penn’s renewed focus on brick-and-mortar investments, and that GLPI receives notice and project information when tenants pursue larger capital improvements.

About Gaming and Leisure Properties (NASDAQ:GLPI)

Gaming and Leisure Properties, Inc NASDAQ: GLPI is a real estate investment trust (REIT) specializing in the ownership and management of gaming and entertainment properties. Established in 2013 as a spin-off from Penn National Gaming, the company was designed to acquire and hold real estate assets associated with casinos, racetracks and other gaming facilities, while leasing those assets back to operating partners under long-term, triple-net lease agreements.

The company's core activities involve identifying attractive gaming real estate, structuring lease agreements that align tenant incentives with property performance, and actively managing its portfolio to enhance asset value.

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