REIT sues Cannery Casino Resorts over racetrack casino purchase

LAS VEGAS -- The company buying a Pittsburgh area racetrack casino owned by Cannery Casino Resorts has sued the Las Vegas-based casino operator for allegedly breaching the $465 million purchase agreement.

Gaming and Leisure Properties, the real estate investment trust spin-off from Penn National Gaming, Inc., said Tuesday it was unclear what impact the lawsuit that was filed in New York would have on closing the transaction, which was announced in May.

The company is seeking unspecifiedf damages from Cannery.

Gaming and Leisure Properties revealed the lawsuit as part of the company’s third-quarter earnings.

“It appears that Gaming and Leisure Properties may have legal recourse to unwind the proposed transaction or at least negotiate a lower purchase price,” J.P. Morgan gaming analyst Joe Greff told investors.

Gaming and Leisure CEO Peter Carlino said the lawsuit was “a last resort” because the company has not been able to open conversations with Cannery officials concerning the transaction.

Carlino said the lawsuit over The Meadows Racetrack and Casino deal would not have any effect on future deals for the company. Gaming and Leisure Properties owns the bulk of Penn National’s portfolio and leases the properties back to the company to manage.

Cannery Casinos operates the Cannery-branded casinos in North Las Vegas and on the Boulder Highway.

Gaming and Leisure Properties had been seeking a company to manage the racetrack casino.