Gaming operator Bally’s Corporation has completed its $148m (£137.4/ €153.8) acquisition of the Tropicana Las Vegas Hotel and Casino from Gaming & Leisure Properties (GLPI) and Penn Entertainment.
The deal was initially announced in April 2021. Bally’s will pay GLPI and Penn $148m for Tropicana’s non-land assets associated with the casino, and will lease out the land beneath for an initial 50-year term, at an annual rate of $10.5m.
The casino will be Bally’s first property it will operate on the Las Vegas strip, and includes 1,470 guest rooms, 50,000 square feet of casino space, 1,000 gaming positions and 100,000 square feet of convention and meeting space.
In Bally’s Q2 earnings call, Lee Fenton elaborated on the company’s plans for the new venture: “For [Tropicana], we’ve said that we will continue to operate the property. We obviously – I think it’s well-advertised that we intend to develop at some point in the future, but we will run the property on an as-is basis at least for the next 12 months until we have identified the plan and the partnerships that we want going forward.”
Company CFO Bobby Lavan explained that the property would have to be further developed to generate revenue: “the way we’re viewing the property as is today is the rent associated with it is $22.5 million and it will generate $20 million to $25 million of EBITDAR, so earnings neutral.”
The acquisition happens in the context of Bally’s revising its full year revenue and earnings projections downwards due to results this year, currency movements and lower expectations in Atlantic City.
When the deal was first announced then CEO George Papanier said, “Landing a preeminent spot on the Las Vegas Strip is a key step for us. The Strip is visited by over 40 million players and guests per year, which we believe will significantly enhance Bally’s customer base and player database, as well as unlock marketing opportunities to leverage the iconic Bally’s brand.”