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Quicken Loans Inc. founder Dan Gilbert is looking to exit the casino business, including properties in Cleveland, Cincinnati and Detroit, according to people familiar with his plans.

Deutsche Bank and Credit Suisse are representing Gilbert’s casino company in the sale process, and Caesars Entertainment Corp. is among the possible bidders that have expressed interest in some properties, said the people, who asked not to be identified because the discussions are private. Representatives for both banks and Caesars declined to comment.

“It is Jack Entertainment’s long-standing policy to not comment on rumors or speculation,” the company said in a statement Wednesday.

Gilbert, a billionaire who also owns the Cleveland Cavaliers basketball team, began eyeing gambling as part of a strategy to revive struggling downtowns in older U.S. cities. He backed a 2009 ballot measure to legalize casinos in Ohio and opened his first property in the historic Higbee’s department store building in downtown Cleveland three years later.

Jack Entertainment, based in Detroit, has interests in six casinos and racetracks, including Jack casinos in Ohio and the Greektown Casino-Hotel in Detroit, which Gilbert acquired in 2013. The properties may be sold separately. He’s worth an estimated $7.8 billion, according to the Bloomberg Billionaires Index.

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Acquisition Wave

The gambling industry is in the midst of an acquisition wave, thanks in part to the emergence of casino-based real estate investment trusts that allow bidders to pay higher prices for properties. The U.S. Supreme Court’s legalization of sports wagering in May has added to their potential growth prospects.

Caesars completed the acquisition of two Indiana racetrack-casinos for $1.7 billion in July. MGM Growth Properties LLC, an affiliate of MGM Resorts International, paid $1.06 billion for another such property, the Hard Rock Rocksino Northfield Park, near Cleveland, the same month.

Still, the business is competitive. Gilbert’s properties only ranked third and fourth in terms of gambling revenue this year among Ohio’s four stand-alone casinos, even though the Jack Entertainment properties are located in the center of the state’s two largest cities.

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Caesars has considered purchasing Gilbert’s casinos in combination with Vici Properties Inc., a REIT it spun off last year, according to the people. Caesars was Gilbert’s partner in the Cleveland and Cincinnati properties, which operated under the Horseshoe name until he bought out Caesars three years ago.

Gilbert’s company is still an investor in Caesars’ Horseshoe Baltimore casino. Vici President John Payne supervised the company’s central U.S. casinos when he worked for Caesars.

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https://www.bloomberg.com/news/articles/2018-09-05/billionaire-gilbert-is-said-to-be-looking-to-cash-out-of-casinos