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Cherokee Operator Buys Gold Strike Tunica, Prepares Arkansas Project

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Cherokee Nation Businesses, which is planning to start construction of a $225 million resort and casino in Pope County, has reached an $450 million cash agreement to buy the operations of the Gold Strike Tunica casino on the Mississippi River south of Memphis.

CNB Chief Executive Officer Chuck Garrett said the expansion into Mississippi is in step with its Arkansas project, Legends Casino & Resort, in a push outside its traditional base. CNB subsidiary Cherokee Nation Entertainment operates 10 Oklahoma casinos, three hotels, a horse racing venue, golf courses and cultural tourism enterprises.

“The opportunity to expand our gaming and hospitality footprint outside of the Cherokee Nation Reservation and into commercial markets like Arkansas and Mississippi is truly exciting,” Garrett said in a statement accompanying the announcement of the Tunica purchase on Thursday.

On the topic of the Arkansas casino, he said land acquisition and permitting have been a priority, as well as lingering litigation over the state of Arkansas’ contested granting of a gaming permit to CNB after a ruling in its favor by the Arkansas Supreme Court.

“In Pope County, our talented team of design professionals continue to make great progress on our development plans for Legends Resort & Casino,” Garrett added. “We continue to acquire land and look forward to proceeding with construction upon receiving the necessary permits and once all outstanding litigation is resolved. Furthermore, we remain wholly committed to fulfilling the terms of the Economic Development Agreement executed with Pope County.”

Asked about a project timeline, Cherokee spokesperson Allison Burum said it’s fluid but full speed ahead. “Land continues to be acquired (several parcels have closed already with many more to quickly follow) and development plans are scheduled to be presented to the Russellville Planning Commission on July 11,” she said. “At that time, we will be putting out a few new renderings and hope to be able to release some project-related announcements in the weeks following.”

The $450 million Gold Strike deal includes a long-term lease agreement with VICI Properties Inc., which owns the property. About a 30-minute drive from Memphis, it features a 32-story hotel tower, among Tunica’s most recognizable sites, more than 1,100 oversize guest rooms including 125 suites. The 50,000-square-foot casino includes a sportsbook, high-limit gambling and a conference and convention center, a company press release said, not to mention restaurants and bars.

“Cherokee Nation Entertainment has a rich history of operating award-winning hospitality destinations in Oklahoma, and we are proud to continue our growth in gaming and bring the level of excellence we are known for to the Tunica area,” said Mark Fulton, president of Cherokee Nation Entertainment. “We are excited for the team at Gold Strike Tunica to join the CNE family.”

Garrett, the parent company CEO, said the purchase and the Arkansas project as part of a “strategic plan to grow our footprint outside of the Cherokee Nation Reservation.” He also expects the Cherokee purchase to have “a significant positive impact on the local economies we serve.”

The floating casinos of Tunica, Mississippi, boomed after the state legalized riverboat gambling in 1990, but as other options opened, the river casino market declined, starting with the recession of 2007-2008. Since 2010, revenue has fallen at least 6% per year, and recent competition from full-fledged casinos in Arkansas, including Southland’s operation in West Memphis, has taken a toll. Nevertheless, Tunica’s casinos still bring in some $600 million in gambling revenue per year.

The Gold Strike transaction is subject to regulatory approvals and other customary closing conditions. CBRE Securities served as exclusive strategic and financial adviser to Cherokee Nation Businesses in the deal. Latham Watkins, along with Scale LLP, were legal advisors; Jones Walker was special gaming counsel.

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