Bally’s to pay $308M for Tropicana hotel on Las Vegas Strip

The Tropicana Las Vegas Hotel and Casino, named after Sin City, is being sold to a newcomer among the resort owners of Las Vegas Boulevard.

LAS VEGAS (AP) – The Tropicana Las Vegas Hotel and Casino, a namesake of Sin City, is being sold to a new addition among the resort owners of Las Vegas Boulevard.

Rhode Island-based Bally’s Corp. announced Tuesday that it will acquire the iconic Strip property from Gaming and Leisure Properties Inc. for approximately $ 308 million.

The agreement for the nearly 1,500 room hotel, casino, theater and convention property also includes a sale and leaseback transaction for Bally’s Black Hawk, Colorado and Rock Island, Illinois casino properties.

“Landing a prominent spot on the Las Vegas Strip is an important step for us,” said George Papanier, President and CEO of Bally, in a statement.

Bally’s Corp. doesn’t own Bally’s Las Vegas on the Strip. The 2,800 room property on Flamingo Road is owned and operated by Caesars Entertainment Inc.

Papanier noted that Las Vegas attracts more than 40 million tourists annually and that owning the Tropicana will improve Bally’s customer and player databases, open up marketing opportunities, and promote Bally’s online and interactive business.

Bally’s also announced a partnership with London-based online gaming company Gamesys Group plc.

Gamesys chairman Neil Goulden said in a statement that the recommended cash offer, including a dividend from Gamesys for fiscal 2020, is a 41.2% premium on Gamesys stock price at the time of Bally’s original proposal. Gamesys shareholders can choose to convert equity into Bally stock.

The Bally’s-Tropicana transaction is expected to close early next year. The company said the Tropicana property’s non-land price was $ 150 million and Bally plans to lease the Tropicana property’s underlying land for an initial 50-year term of $ 10.5 million annually lease.

In the sale-and-leaseback transaction of Bally’s Black Hawk and Rock Island, gaming and recreational properties pay $ 150 million and an initial annual fixed rent of $ 12 million.

Bally’s owns and operates 12 casinos in eight states, including Bally’s Atlantic City, New Jersey, and, upon completion of multiple acquisitions, is expected to own and manage 15 casinos in 11 states.

The Tropicana Atlantic City is owned by Caesars Entertainment.

Bally’s is already licensed as a casino operator in Nevada. The MontBleu Resort near Lake Tahoe was bought by Caesars earlier this month.

The Tropicana Las Vegas opened in April 1957. It has two towers of 22 and 21 stories on 14 acres of land at an intersection of Las Vegas Boulevard and a major thoroughfare named after it. The hotel has operated as DoubleTree by Hilton for the past few years.

When it opened in 1957 with three floors and 300 rooms priced at $ 15 million, it was dubbed the most expensive hotel-casino in Las Vegas and dubbed the “Tiffany of the Strip”.

The flamingo had been open for a decade, the Sahara for nearly 15 years. The Stardust skyscraper opened the following year and cost $ 8.5 million.

“It was viewed as a cut above other places and a little more intimate,” said David Schwartz, a gambling historian and former director of the Center for Gaming Research at the University of Nevada, Las Vegas. “It is one of the most famous buildings that is still open today.”

Historian Michael Green said organized crime was often involved in Tropicana’s operations but noted that it is now company owned.

“The Trop has an eventful history and an eventful past. But there was also a significant non-mob period, ”said Green.

“Les Folies Bergere” was at home here for almost 50 years – a glittering and feather-light topless revue with the typical Vegas show girls, until it was closed in 2009.

Sammy Davis Jr. played at the Tropicana, Schwartz said. Noting that Eddie Fischer was the headliner on the opening night, Green said the illusionists who tame lions and tigers Siegfried & Roy got their start in Las Vegas at the venue before ending up at The Mirage.

Today the area at the southern end of the strip is surrounded by mega-resorts: MGM Grand, Excalibur, New York-New York, Luxor and Mandalay Bay. It has been trading hands in the last few decades and is considered a location with growth potential.

“As it evolved, it has always been seen as a place where you can do something bigger,” Schwartz said.

The property was purchased by Penn National Gaming for $ 360 million in 2015, and Penn sold Tropicana land for $ 337.5 million in rental credit to its spin-off Gaming and Leisure Properties last year.

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