GAMING & LEISURE PPTYS INC earnings calls

Bally Chicago underwriting and Prologis JV

Q (Greg McGinniss · Scotiabank): Analyst asked how scaling back Bally Chicago changes GLPI's underwriting and expectations. He also asked how additional investment in the Prologis JV could be funded accretively.

A: Management said their underwriting for Bally Chicago has not changed and GLPI's capital funding is on the same schedule. They underwrote the chance of VLTs and expect the incremental amenities will be developed, possibly over a longer time. For the Prologis JV they said the land was already on GLPI's balance sheet and they may invest up to 30% depending on the opportunity.

"From GLPI's perspective, our capital funding is going out on the same schedule it was." — Carlo Santarelli

Prologis JV and non-gaming deals

Q (James Feldman · Wells Fargo): Analyst asked if the Prologis JV means GLPI will do more non-gaming deals. He also asked how GLPI thinks about using JVs to grow the balance sheet.

A: Management said the Joliet deal was a unique situation tied to an attractive land parcel and is better thought of as a one-off. They may see other opportunities but will be selective. JVs are another tool they can use if needed, and if they step outside gaming they'll partner with experienced firms like Prologis.

"I think simplistically, this was a unique situation where we had a very attractive land parcel." — Carlo Santarelli

Buybacks and confidence in Bally's

Q (Bennett Rose · Citi): Analyst asked about starting a share buyback given the high dividend yield and steep discount, and asked about confidence in Bally's given the going concern language. He asked other ways to reduce the share discount.

A: Management said the Bally's leases are well covered and they feel good about the core assets. They discuss buybacks but do not view buybacks as a priority and consider them a last resort; they prefer pursuing accretive transactions from the pipeline. They remain confident in the Bally's rent coverage levels.

"I don't necessarily think it's something we're running to do but I think it's something we do discuss routinely and we'll continue to do so." — Carlo Santarelli

Accretive deals and funding plans

Q (Brad Heffern · RBC): Analyst asked if there are accretive transactions that would work at the current cost of equity.

A: Management said yes, they will do accretive transactions and will not use equity when it is too expensive. They are funding development mainly with free cash flow and debt because they view their equity price as too low. They believe they can still put good deals together using the strength of their balance sheet.

"we're funding it with free cash flow and with debt for the most part because we don't like the price of our equity, to be honest and it is way too low." — Desiree Burke (CFO)

Deal quality and selection

Q (Steven Ladany): Analyst asked whether focusing on qualitative features of transactions can create accretive deals given higher capital costs.

A: Management said the current market lets them be more selective and focus on qualitative features like tenant relationships, demographics, and property attributes. That may allow them to buy better assets for a given price now that cap rates have widened. They said they remain open for business.

Bally's going concern and credit risk

Q (Brad Heffern · RBC): Analyst asked how Bally's going concern filing and recent capital arrangements changed GLPI's view of Bally's credit risk.

A: Management said their overall view of Bally's credit risk has not changed and they were not surprised by the 10-Q disclosure. They noted Bally's has assets that could be monetized and that GLPI's leases and underlying Bally's properties are, on balance, positive. They also said GLPI would have legal rights in the event of a debt default and could reposition assets if necessary.

"I don't think our overall view of their credit risk has changed." — Brandon Moore (COO)

Star fine and cap rate moves

Q (Ravi Vaidya · Mizuho): Analyst asked if Bally's is responsible for the Star Entertainment fine and how that affects Bally's liquidity and funding. He also asked how much cap rates have moved versus a year ago.

A: Management said the Star fine issue is isolated to Star Entertainment and Bally's Corp. is unrelated to that investment; Star has cash and time to pay the fine. On cap rates, they pointed to a recent large deal done at a 7.5% cap that would not be sub 8% today and estimated cap rates are about 75 basis points wider versus that reference deal.

"Bally's Corp. is completely unrelated to this investment." — Carlo Santarelli

Buying gaming real estate and tribes

Q (Barry Jonas · Truist): Analyst asked if GLPI would buy already-leased gaming real estate from other owners looking to recycle capital. He also asked for an update on tribal discussions and whether those could extend to off-reservation deals.

A: Management said they are interested in acquiring real estate but their underwriting may differ from others, so they will review opportunities and not assume deals are plug-and-play. On tribal deals, relationships are progressing but move slowly; there is an educational aspect and some tribes are receptive to monetizing assets and expanding beyond tribal land over time.

"We -- by all means, we definitely have an interest in acquiring real estate." — Steven Ladany

Impact of Chicago delay on GLPI

Q (Robin Farley · UBS): Analyst asked what a delay in Bally Chicago's opening would mean for GLPI and how that would play out.

A: Management said there is virtually no direct impact to GLPI because GLPI is paid as its capital is funded in real time. A delay would mainly delay Bally's own cash flow realization and could intensify Bally's liquidity pressures, which is an indirect effect GLPI is monitoring. They emphasized they are focused on those indirect impacts.

"I think from a high level, virtually no impact to GLPI in the sense that when our dollars are funded, we're getting paid for those dollars real time." — Brandon Moore (COO)

Regional asset trading and deal flow

Q (David Katz · Jefferies): Analyst asked if GLPI is seeing early-stage deal flow for regional asset trading and how they are positioning to participate.

A: Management said they see public and private processes brewing and expect regional properties will change hands as part of a normal cycle. They are maintaining relationships with sellers and cultivating relationships with smaller private operators to get as many opportunities as possible. They noted recent regional operator results show solid EBITDAR performance, which can prompt some parties to consider transactions.

"I think separate from that, I think there are some private processes that are currently brewing that we're aware of." — Steven Ladany

Free cash capacity and Joliet JV value

Q (Todd Thomas · KeyBanc): Analyst asked how much incremental investment capacity GLPI has using free cash flow and whether 5 to 5.5x leverage target still holds. He also asked what the 20% JV interest could represent once developed.

A: Management said nothing has changed on leverage and after funding current transactions through '27 and '28 they expect to be at the low end of the 5 to 5.5x range. They said there is dry powder and capacity to do more deals without raising equity. On the Prologis JV, they cannot yet disclose modeling details but said converting non-earning Joliet land into a development structure will be a net positive and should earn a healthy return.

"we took a non-earning asset that was sitting on our balance sheet, which was land in Joliet and we now put it into a structure that will ultimately earn a very healthy return." — Desiree Burke (CFO)

Types of deals and lease coverage

Q (Caitlin Burrows · Goldman Sachs): Analyst asked what types of deals make up their forward pipeline and asked about trends in lease coverage and what would be concerning.

A: Management said the majority of current discussions are traditional sale-leaseback transactions, with some conversations on greenfield or redevelopment but fewer of those. They said overall rent coverages are strong and improving sequentially, and even lower coverage figures in their portfolio remain healthy. They are not currently concerned about rent coverage levels.

"I'd put the majority of that discussion in the sale-leaseback bucket." — Steven Ladany

Lease default risk and Chicago progress

Q (Ronald Kamdem · Morgan Stanley): Analyst asked whether the going concern status creates ripple effects on leases and what data points to watch for Chicago's reception and ramp. He also asked about variable rate resets and percentage rent changes.

A: Management said leases have disclosed rent coverage thresholds and Bally's current coverages (about 1.98 and 2.13x) are well above default levels. They said Chicago construction is roughly two-thirds complete with over 1,000 workers and the hotel structure and casino are expected to be weather tight by December, which helps winter work. They added there are no rent resets in 2028 and the percentage rent decline for 2027 is $3.3 million, of which $2.2 million will happen in '26.

"we have rent coverage ratios that they can't go below, that are all disclosed in our release, right, as far as the default goes." — Desiree Burke (CFO)

Las Vegas vs regional markets; midterms

Q (Chad Beynon · Macquarie): Analyst asked about GLPI's appetite for Strip exposure given recent results and asked what political items in the midterms they are watching.

A: Management said Las Vegas can be very volatile but regional markets are resilient and 'essentially bulletproof' over time. They are focused on regional markets and not overly concerned by Vegas seasonality. For the midterms they are watching some governors' races, Virginia pari-mutuel issues related to a Cordish Live! project, and Northeast Indiana ballot initiatives, but overall expect limited direct impact to their assets.

"the revenues coming out of regional markets are essentially bulletproof." — Peter Carlino (CEO·CHAIR)

A's stadium project and GLPI role

Q (Jason Wayne · Barclays): Analyst asked for an update on the A's stadium and what GLPI's role could be on the integrated resort.

A: Management said the A's stadium project is progressing and they expect it to be on track for a 2028 opening. GLPI has $125 million remaining committed and has not been asked to commit more; they are waiting to see how infrastructure and the integrated resort plans develop before deciding on additional funding. They remain ready to fund when needed but want more clarity first.

"GLPI has not been asked at the present time, or I should say we haven't committed to anything in addition to the $125 million we have remaining." — Brandon Moore (COO)

Historical racing machines and room count

Q (David Hargreaves · Barclays): Analyst asked whether historical racing machines at a Massachusetts park are permissible and asked how many rooms Bally Chicago will open with.

A: Management said they have no firm opinion on the historical racing legislation but are aware of efforts and that it could help Plainridge. On room count they said they do not know the exact opening-day room count but expect Bally's to comply with the HCA minimum number of rooms.

"The HCA has a minimum number of rooms in it." — Brandon Moore (COO)

Operator confidence and consumer spending

Q (Daniel Guglielmo · Capital One): Analyst asked what regional operators are saying on the ground and why GLPI and operators remain confident to keep deploying capital despite consumer cost pressures.

A: Management said employment is the biggest driver of regional gaming and current operator results remain solid. They pointed to 2026 third quarter gaming revenue being up a little bit over 2% and several operators reporting low- to mid-single-digit EBITDAR growth, which supports continued confidence in demand and capital deployment.

"If you look at the cadence of 2026, again, in the third quarter, you're going to see gaming revenue up a little bit over 2%." — Carlo Santarelli

Non-gaming opportunities and leisure deals

Q (Colin Mansfield · CBRE): Analyst asked whether GLPI's view on venturing outside gaming has changed and whether they see attractive leisure opportunities to provide capital to stressed operators.

A: Management said their approach to non-gaming opportunities has not changed: any move outside gaming must be accretive and come with partners who have the expertise. They will continue to consider opportunities but still see many gaming opportunities to pursue and will focus on what they know best while remaining open to other ideas with experienced partners.

"If you see us venture outside of gaming, as we've done with Prologis, we'll seek to do it with folks that know what they're doing and can help us grow in that whatever business we enter into." — Brandon Moore (COO)