A piece of Las Vegas’ nostalgic past just got a new landlord. And Bally’s continued to define itself as one of the most innovative gambling companies in the world, an industry analyst told PlayUSA.
Bally’s Corp. announced on Tuesday that it would purchase the Tropicana Las Vegas from Gaming and Leisure Properties in a deal valued at $308 million by the new owners. The deal includes a “sale and lease-back” agreement with Bally’s casino properties in Black Hawk, Colorado and Rock Island, Illinois.
Bally’s will pay $150 million for the property and $10.5 million yearly for 50 years to lease the site. The rent is subject to increases.
Bally’s is making some big moves
The Rhode Island-based Bally’s has recently raised its mainstream profile with a deal to rebrand Sinclair Broadcast Group programming as Bally’s Sports, then collaborate in content-creation. In January it announced plans to buy DFS site Monkey Knight Fight.
CEO George Papanier said in a statement that the transaction would “unlock marketing opportunities to leverage the iconic Bally’s brand” and “support the growth and development of our online and interactive business.”
Jason Ader, CEO of SpringOwl Asset Management said while the move will give Bally’s a “strategic flag in the ground,” it more importantly expands the empire elsewhere.
“I really like what Bally’s is doing at a very high level,” Ader said. “They’re really sort of defining a company for the next decade. They’re integrating a gaming brand, casino assets, TV stations, technology, e-sports, fantasy sports as well with Monkey Knife Fight. If they’re not the most forward-looking, innovative gaming company out there, they’re certainly one of them. They’re in the top. And I think what they’re doing is very interesting, very groundbreaking, very unique.”
“Landing a pre-eminent spot on the Las Vegas Strip is a key step for us,” Papanier said. He added that the 35-acre parcel on the corner of Tropicana Boulevard and Las Vegas Boulevard with 1,470 guest rooms and 50,000 square feet of casino space could require “exploring significant redevelopment.”
The 64-year-old property marinated in mobster and movie star lore is currently operated by Penn National Gaming after the company sold the land to GLPI for $307.5 million in 2020. This deal is scheduled to close in “early 2022,” according to the release.
Bally’s will own and operate 15 casinos in 11 states after this and other pending deals close, according to a release.
As a note, Bally’s Las Vegas Hotel & Casino on the Strip is unaffiliated and owned by Caesars.
Twin River Worldwide Holdings became Bally’s after purchasing the name and brand from Caesars Entertainment for $20 million in 2020. Yes, it can definitely get a little confusing.
Ader estimated the building a new Tropicana on its current site could cost upwards of $3 billion. The economy of Las Vegas doesn’t justify it now, he said.
“Specific to Tropicana, to me, personally, I think Las Vegas right now is not an attractive market over the foreseeable future, just based on my expectation that business travel, meetings group convention is likely to recover quite slowly,” he said. “And we’ve all gotten used to Zooming and video conferencing. That being said, the demand for Vegas should be quite good from a leisure side, but the business travel, the Monday-through-Thursday business will take some time and Las Vegas like most leisure markets is very discounted.
“If you want a great deal this summer, you can get a room the Bellagio for almost $100, which was certainly never contemplated when it was built.”
No, Ballys is Caesars in Las Vegas. Ballys is Ballys elsewhere. Tropicana is Caesars in Atlantic City and Indiana. Tropicana will be Ballys in Las Vegas.
Find the queen. pic.twitter.com/Gm4PrcZajn
— Captain Jack Andrews (@capjack2000) April 13, 2021
Bally’s project revenue bump in COVID recovery
In a busy day for the company, Bally’s estimated preliminary first-quarter results of consolidated revenue greater than $185 million and adjusted EBITDA greater than $50 million.
The company posted revenue and adjusted EBITDA of $109.1 million and $22.1 million, respectively, for the same period in 2020. The company cited “month-to-month revenue cadence that accelerated dramatically in March as more COVID-19 restrictions were relaxed across the country.”
Adding in Las Vegas is a smart move, as the city is reopening and rebounding faster than anticipated.
Tropicana has had a rocky several years, from changing hands and lawsuits to snafus with The Mob Experience and Nikki Beach Club. Here’s hoping the resort can get a fresh start thanks to its new ownership.