Bally’s (NYSE:BALY) has gained approval from Nevada regulators to run the Tropicana Las Vegas, and the gaming firm is focusing on a significant overhaul of the property, probably in 2024.
Tropicana Las Vegas, seen above. Operator Bally’s is promising main redevelopment of the venue. (Picture: Vegas Means Enterprise)
On Thursday, the Nevada Gaming Fee (NGC) signed off on the gaming firm taking management of operations on the venerable Strip venue. That call arrived about two weeks after the Nevada Gaming Management Board (NGCB) made the identical name.
In April 2021, Bally’s acquired Tropicana’s non-real property belongings from Gaming and Leisure Properties (NASDAQ: GLPI) in a transaction valued at $308 million. As a part of that deal, the gaming firm offered the property belongings of venues in Colorado and Illinois to the GLPI actual property funding belief (REIT) and agreed to lease again these properties. Bally’s has a 50-year lease for Tropicana beginning at $10.5 million yearly.
Penn Leisure (NASDAQ:PENN) beforehand operated the built-in resort. With the regulatory approvals in place, Bally’s makes its preliminary foray to the Strip, whereas Penn not has a venue there.
Western Flagship for Bally’s
Bally’s President George Papanier advised NGC members that the corporate views Tropicana as its “flagship” gaming venue within the Western US. Along with Tropicana, Bally’s regional properties embody three namesake casinos, a racino in Colorado, and Bally’s Lake Tahoe.
These are good satellite tv for pc holdings, however the Las Vegas Strip is a special ballgame. As such, Bally’s wants to claim itself within the US on line casino mecca, and a method of doing that’s to dramatically refurbish Tropicana.
However on this case, we expect we must also consider the potential for a whole redevelopment, due to its aggressive place out there proper now,” Papanier advised the NGC.
He advised the regulatory board that the corporate will run Tropicana for 18 to 24 months earlier than deciding easy methods to proceed with redevelopment. The operator is already in talks with potential companions that would present capital for an overhaul effort.
Earlier this yr, Bally’s Chairman Soo Kim advised reporters the corporate is eyeing important modifications at Tropicana, and that demolition and rebuilding of the property are potential. One factor is definite: Tropicana will ultimately bear the Bally’s identify. Except the Onerous Rock Resort & On line casino in Biloxi, Miss., all the operator’s venues sport the Bally’s model.
As for Gaming and Leisure’s view on redevelopment, they’re not on the hook by way of monetary publicity. However the actual property firm is prioritizing lease assortment and the venue remaining a gaming property.
Bally’s Pressed on Funds
On the assembly, NGC member Ben Kieckhefer pressed Bally’s executives on the corporate’s funds, asking for particulars on how the operator plans to stability Tropicana refurbishment whereas growing a brand new, $1.7 billion casino-hotel in Chicago.
“I feel on the finish of the day, it (Tropicana) can be a self-fueling alternative from a capital-requirement perspective. We definitely have the bandwidth in our firm to try this,” mentioned Papanier.
Bally’s CFO Bobby Lavan advised commissioners the corporate has entry to a $620 million credit score revolver and has money incoming later this yr from the sale-leaseback of its two Rhode Island casinos to GLPI.
