Bally’s on the Strip
The Tropicana was the very first place I visited in Las Vegas. It got the nod over such iconic locations as the Bellagio and Venetian for the very simple reason that I was staying there. It was fine. I didn’t spend much time there because other casinos were cooler, but it will always have a place in my heart as my “first.” Then again, the one lasting impression I have was that I developed some sort of leg pain that weekend and I was thankful that I was in the nicer hotel tower because the walk from the casino floor to the other one looked went over the horizon. I reminisce a little today because the Trop has been sold by Gaming and Leisure Properties, Inc. (GLPI) to Bally’s Corporation for $150 million. I know I sounded like the Tropicana was being demolished or something, but it’s not. It was just sold.
“Landing a preeminent spot on the Las Vegas Strip is a key step for us,” said Bally’s president and CEO George Papanier on Tuesday. “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.”
Bally’s is not acquiring the land; GLPI will keep that and charge Bally’s $10.5 million in rent for 50 years.
Tropicana is just one piece of the puzzle
That’s the headline transaction, but there is more to the deal. For the exact same $150 million sum, Bally’s is selling GLPI the real estate of its casinos in Black Hawk, Colorado and Rock Island, IL. The ones in Colorado are the Golden Gulch Casino and Golden Gates Casino; their specific names were not mentioned in either company’s press release, so we are just going to go ahead and infer that both are included. The Illinois casino is Lumer’s which Bally’s agreed to purchase last year, but whose sale has yet to be completed.
There are even more pieces of this agreement. If Bally’s acquires or develops properties in Michigan, Maryland, New York, and/or Virginia, GLPI gets right of first refusal for financing and a follow-up seven-year leaseback.
But wait, there’s more. Bally’s also just announced that it is acquiring Gamesys Group. In its deal with GLPI (if I’m reading this all correctly – even GLPI’s CEO said it was “complex”), Bally’s could choose to sell more casinos to GLPI and use the funds to pay for the Gamesys purchase. It would then enter into leaseback agreements with those casinos.
You got all that? The bottom line is that Bally’s has bought the Tropicana Las Vegas and sold casinos in Colorado and Illinois. The Trop will be Bally’s first casino on the Strip, not to be confused with the current Bally’s Las Vegas, which is technically off the Strip and is owned by Caesars. When Bally’s, then Twin River, bought the Bally’s brand last year, it agreed to let Caesars keep the Bally’s name on its Las Vegas property.
Photo credit: Jared via Flickr