Bally’s Corp Arrives on the Las Vegas Strip
Bally’s Corp (NYSE: BALY) has been having a busy year of acquisitions. It has become more involved in sports gambling through its deal with Sinclair Broadcast Group (NASDAQ: SBGI), but it has also been focusing on the casino sector. It recently completed the acquisition of a new casino in Lake Tahoe, and now it has been announced that it is set to buy the Tropicana Las Vegas.
The Tropicana is an iconic Vegas property, and was once a popular hangout for Frank Sinatra and the rest of the Rat Pack. Over the years, the property has been through a number of changes and most recently, Gaming and Leisure Properties (GLPI) purchased it in the middle of the coronavirus pandemic.
Penn National Gaming (NASDAQ: PENN) had owned the building and real estate before selling the land to GLPI, while keeping control of the Tropicana’s operations. However, Bally’s is now set to take over and will be spending $150 million to own and operate the casino, its first property on the Las Vegas Strip.
Bally’s will also be paying $10.5 million each year to lease the site through a contract that is valid for 50 years. The lease agreement reportedly has scheduled increases built into it, but the figures have not been released.
Bally’s has said that it expects to undertake significant redevelopments at the property, but they will not be happening any time soon. In a recent call discussing the company’s acquisition of Gamesys PLC, the company Chair Soo Kim, said “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.”
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.