Berks County-based Penn National Gaming Inc. is cutting ties with Hollywood Casino Jamul-San Diego, saying the casino owed it nearly $48.5 million.
Penn National, headquartered in Wyomissing, developed the 200,000-square-foot casino with the Jamul Indian tribe nearly two years ago for $390 million.
Penn National’s subsidiary San Diego Gaming Ventures LL said it will no longer manage or provide branding and development services to Hollywood Casino Jamul-San Diego, effective May 28, according to a United States Securities and Exchange Commission filing of Feb. 28.
SDGV had advanced a $98 million loan to the Jamul Indian Village of California to build, equip and operate the casino before providing the federally recognized tribe with “delayed draw term loans and limited completion guarantee” worth about $29 million, according to reports.
Penn National said in a news release it had a fourth-quarter impairment charge of $48.5 million in its outstanding financial commitments with the Jamul Indian Village of California. Penn National said its decision to sever ties with the tribe will result in additional losses of about $29.4 million along with unexpected costs related to the termination and transition of its management contract.
Jamul Indian Village Development Corp., which owns the gaming and entertainment facility, said it had been its long-held goal to manage its own casino and become economically self-sufficient.
“We are grateful to Penn National for all their hard work and leadership in bringing what was a very challenging development project to fruition,” Erica Pinto, tribal chairwoman, said in a statement.
The controversial casino had been strongly opposed by some in the community.
The casino will be renamed Jamul Casino.
Penn National owns or operates 29 gaming and entertainment facilities in 16 states and Canada. Hollywood Casino Jamul was its only casino in California and its second Native American facility.
Penn National operates one casino in Pennsylvania, Hollywood Casino at Penn National Race Course in Grantville, Dauphin County, and off-track wagering sites in Lancaster and York counties.