The Nevada Gaming Control Board on Wednesday paved the way for Bally’s Corp. to take over the operations of the Tropicana Las Vegas and redevelop the Strip property as its western flagship.
Bally’s is purchasing the Tropicana from Gaming and Leisure Properties, a gaming-focused real estate investment trust, for $308 million. The deal, first announced in April 2021, is expected to close if the Nevada Gaming Commission approves the recommendation from the Gaming Control Board at its September 22nd meeting.
The purchase price for the Tropicana property’s non-land assets is $150 million. In addition, Bally’s has agreed to lease the land underlying the Tropicana property from GLPI for an initial term of 50 years at an annual rent of $10.5 million, subject to increase over time. Penn Entertainment currently operates the casino.
The Tropicana sits on a 35-acre parcel at the corner of Tropicana and Las Vegas Boulevards. It includes 1,470 guest rooms, 50,000 square feet of casino space, a 1,200-seat performance theater, and 100,000 square feet of convention and meeting space.
Bally’s President George Papanier told the board the casino company has been busy growing its footprint by integrating several properties, rebranding them with the Bally’s name, and developing and expanding existing properties on the East Coast and in the Midwest. In May, Chicago tapped Bally’s to develop a $1.7 billion casino by the end of 2026, and a temporary casino that will open by June of next year.
In addition to spending 90 to 180 days evaluating existing operations and focusing on enhancing the current performance levels at Tropicana Las Vegas, Papanier said, Bally’s will evaluate the “potential for significant redevelopment plans” and master site planning.
“We view Tropicana Las Vegas as an opportunity for a flagship property for our western region,” Papanier said. “We typically spend 90 to 180 days developing marketing strategies upon the acquisition of the property. In this case, we think we should also evaluate the potential for a complete redevelopment of the property (to improve) its current competitive position within this market.”
While the Tropicana has been talked about as a potential stadium site for the Oakland A’s should the franchise relocate to Las Vegas, the issue never arose during the hearing.
Bally’s said the property will continue to operate under the Tropicana brand, but will be converted to Bally’s with any development plans. Officials said it will take at least 12 to 24 months of operation before any redevelopment takes place.
The one concern raised by the board was Bally’s current interactive operations in international gray markets – markets that aren’t legalized or prohibited. The company said it’s comfortable operating in those locales, but its compliance committee is evaluating them and would not do anything to jeopardize its standing.
Board member Phil Katsaros raised the question: if gaming is outlawed in a jurisdiction, but interactive is not mentioned, does that make it a gray market?
Bally’s said it follows the New Jersey regulatory approach, which signs off on that.
“Most laws around the world (going back over the past decade) never discussed if it’s brick and mortar, online or some futuristic offering,” Katsaros said in response. “The reality was everybody was being very aggressive unless told not to do something. My head right now is about understanding the corporate culture of everybody that comes before us and their approach to online gaming and how they enter the market. It’s not just you guys. It’s a broader question, and we’ve had similar discussions with other companies as well.”
In a question, Board Chairman Brin Gibson raised the issue that Bally’s is not in violation of any federal action that would prohibit a company from doing business as it does. Gibson cited Bally’s outside counsel Dan Reaser.
“Regarding the opinions you seek out in gray markets, you have a very fine firm, but I would say I know Mr. Reaser in that insofar that he is comfortable with them I have a great deal more comfort,” Gibson said.
Bally’s already has a presence in Nevada. Caesars Entertainment, formerly Eldorado Resorts, sold the operations of MontBleu, the one-time Caesars Tahoe, to Bally’s for $15 million. It was rebranded Bally’s Lake Tahoe in November 2021.
Papanier told the board that Bally’s is the third largest casino operator in the U.S., with a portfolio of 17 casinos in 11 states. In North America, it has sports betting access in 19 states and operates an icasino in New Jersey. Its partnership with Sinclair Media includes Bally Sports branding on 19 regional sports networks.
“Bally’s looks forward to bringing our first-in-class interactive technology to Nevada upon appropriate regulatory approvals, and we look forward to leveraging our growing North America interactive segment to our omnichannel to maximize our retail database and grow our brand awareness through our relationship with Sinclair,” Papanier said.