Executives and legal personnel at Bally’s Corp. are staying busy. The gaming company is in full acquisition mode this year, tackling the industry from various angles. It is getting more involved in sports gambling through its tie-up with Sinclair Broadcast Group but hasn’t forgotten its casino roots, either. Bally’s just wrapped up the acquisition of a new casino in Lake Tahoe and is now adding another on the Las Vegas Strip. The iconic Tropicana Las Vegas is soon going to be part of the growing portfolio at Bally’s.
The Tropicana Las Vegas Becomes Latest Bally’s Asset
The Tropicana has been a regular fixture on the Vegas Strip for decades and was once a popular hangout for Frank Sinatra and the rest of the Rat Pack. It also allegedly has roots as one of the mob’s first Vegas moneymakers, a theory that surfaced after mobster Frank Costello was caught in possession of the venue’s earnings figures in the late 1950s. Since then, the Tropicana has gone through a number of changes, most recently ending up in the hands of Gaming and Leisure Properties (GLPI) last year during the COVID-19 pandemic.
Penn National Gaming had owned the real estate and the buildings before selling the land to GLPI and keeping control of the Tropicana’s operations. Now, Bally’s is going to take over, spending $150 million to own and operate the venue. It will also pay $10.5 million annually to lease the site through a contract that is reportedly valid for 50 years. That lease agreement reportedly comes with scheduled increases in the annual amount, but the figures haven’t been released.
A New Tropicana To Emerge
The Tropicana has undergone a number of changes over the past 70 years, but has been able to withstand an evolving Vegas climate. Bally’s expects to introduce a “significant redevelopment” project at the property, but isn’t in a hurry to complete the updates. Bally’s Chairman Soo Kim said yesterday, during a call discussing the company’s acquisition of Gamesys PLC, “The light financial burden of this transaction allows (CEO George Papanier) and his team to go in and get the operations in order. We’ll wait for the right time to redevelop it. We saw an opportunity (to acquire the property) that might not come again.”
Last month, Bally’s purchased the MontBleu Casino Resort in Lake Tahoe, which gave the company easier access to Nevada’s gaming market. It allowed both Kim and Papanier to receive gaming licenses and should help the Tropicana acquisition go smoothly and quickly. If all goes well, the purchase could be completed by sometime early next year, if not sooner.
Bally’s Juggles Properties Across the US
It’s likely more than just a coincidence that Bally’s and GLPI were able to work out a deal for the Tropicana. The two just signed a lease-back agreement that will see GLPI take the real estate below properties owned by Bally’s in Black Hawk, CO, as well as one the company is working to purchase in Rock Island, IL. The annual cost will start at $12 million for the lease, but will increase over time, and GLPI is going to pay $150 million to purchase the real estate.
Said GLPI Chairman and CEO Peter Carlino, “We are delighted to expand our relationship with Bally’s through a complex transaction that is a win-win for both companies. We are also excited to have secured rights of first refusal on potential future assets.”