Gaming And Leisure Properties Expresses Interest In Las Vegas Casino

Written By Nicholaus Garcia on October 31, 2022
property transaction las vegas strip lease

Peter Carlino, CEO of Gaming and Leisure Properties Inc. (GLP) has an interest in acquiring another property on the Las Vegas Strip if the price is right. 

The real estate investment trust is primarily affiliated with Penn Entertainment (PENN) and Bally’s Corp. 

In September, GLP negotiated a new $145 million master lease to acquire the land under the Tropicana Las Vegas. The company then created a deal to lease the land back to Bally’s for $10.5 million a year over 50 years, resulting in a pretax gain of $67.4 million. 

Plans for another Las Vegas Strip purchase

During a call with investors, Carlino said there have never been any “ill feelings” toward Strip assets. Carlino was very critical about the survival of Las Vegas Casinos during the early months of the pandemic. However, since then, he has said things are just a matter of cost. 

“We’ve found more value in the regional markets. I’ve been chastened a little bit following this latest downturn and recognizing after COVID that the Strip proved to be a lot more resilient than I would have ever have guessed,” Carlino said. 

“We knew what would happen in the regional markets with people the first minute they could go out of their door, they would head over to our properties and did so with great enthusiasm. But Vegas, I was a little bit more cautious about it and I was wrong, frankly.” 

For now, there is no specific property GLP has its eye on. But Carlino said it’s only about money.

“We’re in the cash cow business,” he said. “It’s kind of what we do, big or small. It’s simply, can we get a proper return, a proper spread to our cost of capital and manage our balance sheet effectively at the same time? So there’s no prejudice. We look at Vegas assets, frankly, all the time.”

Gaming revenues explain Carlino’s interest

For a clue into why Carlino is so bullish about owning more real estate in Las Vegas, look no further than how the city’s casinos continue to perform in terms of gaming revenue. According to Richard N. Velotta of the Las Vegas Review-Journal, gaming revenue from properties on The Strip and downtown Las Vegas were both up year-over-year in September.

While gambling win might represent the bulk of revenue these casinos capture, it isn’t the only source. Properties like those in which Carlino wants to invest further have diverse revenue streams like events and hospitality. Carlino isn’t the only business mogul interested, either.

Earlier this month, Golden Nugget owner Tilman Fertitta received approval for his Las Vegas casino project from the Clark County Zoning Commission.

As Carlino alluded to, Vegas casinos weathered a global pandemic and the resulting economic downturn without skipping a beat by some measurements. It seems he believes the time to buy is upon him.

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Nicholaus Garcia

Nick Garcia is a senior reporter for PlayUSA. Garcia provides analysis and in-depth coverage of the gambling industry with a key focus on online casinos, sports betting and financial markets. Garcia has been covering the US gambling market since 2017. He attended Texas Tech University as an undergrad and received a Master of Arts in Journalism from Columbia College Chicago.

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