Bally’s (NYSE:BALY) is planning significant changes at Tropicana Las Vegas when it comes to its acquisition of that venue. The buyer could even knock the history-rich casino-resort down and start over.
In an interview with the Las Vegas Review-Journal, Bally’s Chairman Soo Kim says a variety of options are on the table for the Tropicana, including renovating the resort or demolishing it and starting fresh.
We’re open to it all,” Kim told the media outlet, adding tearing the casino-resort down and starting over is a potential avenue “to maximize value.”
Last April, Bally’s acquired the non-real estate assets of Tropicana from Gaming and Leisure Properties (NASDAQ:GLPI) in a transaction valued at $308 million. As part of that deal, the gaming company sold the property assets of venues in Colorado and Illinois to the real estate investment trust (REIT), and agreed to lease back those properties. Bally’s has a 50-year lease for Tropicana starting at $10.5 million annually.
Kim told the Review-Journal Bally’s expects to close the Tropicana purchase sometime over the next several quarters.
Expect Name Change
As Kim notes, the Tropicana is either in for significant refurbishment or an outright teardown. But what’s not up for debate is that the venue will eventually lose its current name.
Bally’s, as it’s doing the bulk of its other casinos across the country, is likely to apply its name to Tropicana. Previously known as Twin River Worldwide Holdings (TRWH), the operator acquired the Bally’s brand from Caesars Entertainment (NASDAQ:CZR) in 2020. It agreed to license the Bally’s name to the seller for its Strip venue of the same name.
This week, Caesars confirmed Bally’s Las Vegas will take the Horseshoe name, clearing the way for Tropicana to become Bally’s in the future.
Kim adds that his firm’s pursuit of a takeover of Bally’s will not affect the Tropicana purchase. Earlier this week, his Standard General hedge fund offered to acquire the gaming company for $38 a share, valuing it at just over $2 billion. Standard General controls more than 20 percent of Bally’s equity, making it the casino operator’s largest investor.
Big Appeal to Las Vegas Sports
With its purchase of Tropicana, Bally’s is also acquiring 35 acres of land. That prime real estate could be used to lure another professional sports franchise to Las Vegas.
Reports surfaced last month that Major League Baseball’s Oakland A’s are bidding for a stadium at the Tropicana site. Other gaming companies with unused Strip land are believed to be courting the A’s as well. The team could also hammer out a deal to stay in Oakland.
