Posted on: November 4, 2022, 10:53h.
Last updated on: November 4, 2022, 11:50h.
Tropicana Las Vegas is still in contention to possibly be the site of a Major League Baseball (MLB) stadium, according to Bally’s (NYSE: BALY) executives.
On the company’s third-quarter earnings conference call earlier this week, CEO Lee Fenton said the company could consider demolishing the Strip venue so that the Oakland A’s could construct a stadium on that site.
Regardless of the MLB club’s decision, Tropicana could be heading for a tear-down. Earlier this year, Bally’s Chairman Soo Kim told reporters the company is eyeing significant changes at Tropicana, and that demolition and rebuilding of the property is possible.
In September, representatives of the gaming company told the Nevada Gaming Commission (NGC) that the plan is to significantly overhaul the casino resort in 2024, and that effort could include destroying the venue as it currently sits and starting from scratch.
In April 2021, Bally’s acquired Tropicana’s non-real estate assets from Gaming and Leisure Properties (NASDAQ: GLPI) in a transaction valued at $308 million. In an investor deck, the operator highlighted strategic advantages associated with the property.
“The Property benefits from exceptional visibility from McCarran International Airport, East Tropicana Avenue, and the Strip, with annual daily traffic (AADT) of approx. 90,000 cars each day. Potential weekly impressions from signage in this area is estimated to be approx. 400,000,” noted Bally’s.
Bally’s Focusing on Chicago
On the call, Fenton said the company’s initial run operating Tropicana is “encouraging,” but Bally’s focus is on its $1.7 billion integrated resort plan in Chicago. That venue is slated to open in 2026, according to an investor presentation.
We’re pretty close to a land sale and leaseback in Chicago,” so he’s confident. Bally’s will also be rolling the proceeds of other casino sale-and-leaseback transactions into the Second City,” said CFO Bobby Lavan on the call.
He didn’t mention a partner for a sale-leaseback in Chicago, But Bally’s primary landlord is GLPI, and the two have engaged in such transactions in the past. The chief financial officer added that if the economy rapidly changes for the worse, Chicago will remain the operator’s focus.
In Las Vegas, the company is already in talks with prospective partners that could provide capital for an overhaul of Tropicana.
Bally’s Other Plans
Fenton told analysts that Bally’s remains interested in a New York casino, but that its focus is Chicago. The operator has long been tied to rumors regarding a new gaming venue in the largest US city, and that competition is getting increasingly stiff.
Reiterating the emphasis on Chicago, CFO Lavan noted Bally’s could consider more acquisitions over the long term. The company has a long track record of deal-making.
Management forecast a $75 million loss this year for its interactive unit, with Fenton acknowledging the company wants to make that business profitable as soon as possible.
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