Gaming and Leisure Properties Q3 Earnings Call Highlights

Key Points

• Third-quarter AFFO increased more than 10%, supported by acquisitions, lease escalations and development funding. GLPI maintained 2026 guidance of $1.22 billion to $1.225 billion in AFFO, or $4.11 to $4.12 per diluted share and operating unit.
• Regional gaming demand remained resilient, with revenue up slightly more than 2% and nine of GLPI’s 13 properties showing stable or improved rent coverage. Management said Bally’s Chicago remains on track to open in the first half of 2027 despite slower hotel development.
• GLPI continues to see a healthy sale-leaseback pipeline while prioritizing financially accretive investments over share repurchases. Its leverage ratio was 4.8 times, below the company’s 5-to-5.5-times target range, and it is exploring a potential non-gaming development venture with Prologis.

Gaming and Leisure Properties NASDAQ: GLPI reported third-quarter AFFO growth exceeding 10% as acquisitions, lease escalations and development funding lifted real estate income, while management said regional gaming markets remained resilient despite volatility in debt and equity capital markets.

Chairman and Chief Executive Officer Peter Carlino said nine of the company’s 13 properties had rent coverage that was stable or improved for the period ended June 30. CFO and Treasurer Desiree Burke later clarified that the comparison referred to nine of 13 properties, rather than leases.

“The gaming world is very, very strong,” Carlino said, citing continued growth across the regional gaming environment. Management said regional gaming revenue was up slightly more than 2% in the third quarter, while several operators reported low- to mid-single-digit regional EBITDA growth.

Income Growth and Guidance

Burke said total income from real estate rose nearly $38 million from the third quarter of 2025. The increase was primarily driven by $47 million in higher cash income from acquisitions and escalations, partly offset by $9.1 million of year-over-year declines related to non-cash revenue gross-ups, investment-in-lease adjustments and straight-line rent adjustments.

Among the contributors to cash-income growth were the acquisition of Bally’s Lincoln real estate, which added $14 million; the Bally’s Chicago lease, which added $12 million; and Bally’s development funding, which added $1 million. Funding for PENN Entertainment projects in Joliet, Aurora and at M Resort added $8 million, while the Sunland Park strategic acquisition contributed $3.8 million.

Dry Creek, Ione and Cordish Virginia loans added $4 million, and lease escalators and percentage-rent adjustments added approximately $3.8 million. Operating expenses increased $65 million, mainly because of non-cash adjustments to the provision for credit losses, Burke said.

The company maintained full-year 2026 guidance for $1.22 billion to $1.225 billion, or $4.11 to $4.12 per diluted share and OP unit. The outlook excludes future transactions but includes roughly $265 million of additional development funding, bringing expected development spending for 2026 to $800 million.

GLPI ended the period with a leverage ratio of 4.8 times, below its stated target range of 5 times to 5.5 times. Master-lease rent coverage ranged from 1.61 times to 2.46 times as of the end of the prior quarter.

Bally’s Chicago and Tenant Credit

Management said Bally’s Chicago Casino remains on track to open in the first half of 2027, although the timing for certain hotel amenities may be extended. President and COO Brandon Moore said Bally’s decision to slow hotel development did not alter GLPI’s view of the market or the project’s long-term performance potential.

Carlo Santarelli, senior vice president of corporate strategy and investor relations, said GLPI’s capital is being funded on the same schedule as planned and that the casino opening timeline has not changed. He said the delay could push out the timing of the project’s full return on investment, but it would not affect when GLPI receives rent income.

Chief Development Officer Steve Ladany said the overall Chicago project was about two-thirds complete, with more than 1,000 daily workers on site. The casino and hotel structures are expected to be weather-tight by December, he said.

Executives also addressed Bally’s going-concern disclosure, saying it had not changed GLPI’s overall view of the tenant’s credit risk. Moore said Bally’s two larger leases were covered at 1.98 times and 2.13 times, while the company believes Bally’s has assets that could be monetized if needed to support its projects.

GLPI said its leases include certain protections related to rent coverage and material indebtedness defaults. Ladany noted that GLPI would have legal rights under many of its leases if Bally’s were to default on material debt, though management did not indicate whether it would exercise those rights under any particular circumstances.

Pipeline, Capital Allocation and Prologis Venture

Management said it continues to see a healthy transaction pipeline, with most current discussions centered on traditional sale-leasebacks rather than greenfield development or redevelopment projects. Ladany said higher market cap rates may allow GLPI to be more selective and focus on assets with stronger credit, location and competitive characteristics.

He estimated that cap rates on a transaction similar to Golden Entertainment’s previously announced deal could be roughly 75 basis points wider today than when that transaction was announced, suggesting a rate above 8% rather than 7.5%.

While management acknowledged that GLPI’s cost of equity and debt has risen in recent months, executives said they are not relying on equity issuance at current share prices. Burke said the company expects to remain at the low end of its 5-times-to-5.5-times leverage target even after funding existing commitments through 2027 and 2028.

Carlino said share repurchases would be a “last resort,” with the company preferring to pursue accretive investments. Moore said management regularly discusses buybacks but weighs them against existing pipeline opportunities.

The company also discussed its joint venture with Prologis involving the former Hollywood Joliet site. GLPI characterized the arrangement as an effort to generate value from land that had not been producing income. The company can invest up to 30% in the venture, though management said the ultimate investment will depend on the project’s development and tenant mix.

Executives described the Prologis arrangement as a distinct opportunity rather than a broad shift away from gaming real estate. Still, they said GLPI could consider non-gaming investments when they are accretive and when the company can partner with experienced operators.

About Gaming and Leisure Properties (NASDAQ:GLPI)

Gaming and Leisure Properties, Inc NASDAQ: GLPI is a real estate investment trust that owns and leases gaming and entertainment properties. The company primarily operates as a landlord, generating rental income through long-term agreements with casino operators rather than directly managing most of the gaming facilities located on its properties.

GLPI's portfolio includes casinos, resorts, racetracks and related entertainment facilities across the United States. Its leases are generally structured as triple-net agreements, under which tenants are typically responsible for property-level expenses such as maintenance, insurance and real estate taxes.

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