Posted on: April 26, 2024, 02:09h.
Last updated on: April 26, 2024, 02:09h.
On the real estate company’s first-quarter earnings conference call, Gaming and Leisure Properties (NASDAQ: GLPI) executives signaled the recently Tropicana Las Vegas met its shelf life and the fate of the venue operating as a casino resort wasn’t in the long-term cards.
The Bally’s (NYSE: BALY)-operated Strip property closed earlier this month in anticipation of the nine acres occupied by the casino hotel on the 35-acre parcel eventually becoming home to a new baseball stadium for the Oakland Athletics (A’s). The building is scheduled to be imploded on Oct. 20.
I don’t think it was a matter of closing it early, because to save costs and expenses, I think it was a matter of on time closure,” said GLPI COO Brandon Moore on the call. “And with the employees in that market knowing that, that casino was closing, I think Bally’s would tell you they’re having a difficult time keeping appropriate staff in there to keep that project open.”
CEO Peter Carlino refuted speculation that Tropicana was cash flow negative, noting the venue was in fact positive on that metric and that ongoing operation “just wasn’t part of the long-term strategy of the property.” With Bally’s facing financing needs in Chicago and its credit rating recently downgraded by all three major ratings agencies, some analysts have suggested that the gaming company sell its rights to the Strip casino hotel to raise cash.
Speaking of Bally’s Chicago
Bally’s is one of GLPI largest tenants and the regional casino operator is attempting to plug an $800 million shortfall on its $1.1 billion permanent gaming venue in Chicago — its most expensive project to date.
GLPI previously expressed interest in potentially acquiring the real estate of Freedom Center where the casino hotel is to be located, but Moore said in response to analyst question that while the real estate investment trust (REIT) is having dialogue with Bally’s, there are complexities with the Chicago market.
“If Chicago is something that turns out to be in our estimation, good for our shareholders and a good opportunity based on the build, based on the market, I wouldn’t rule it out as something we would consider investing in,” said the chief operating officer. “I don’t think we have enough information today and I don’t think we’re far enough along in that to say that we definitively would or we would not. But I can tell you that we are looking at it.”
Pennsylvania-based GLPI already owns the real estate of six Illinois gaming venues.
GLPI Wants Bally’s Rhode Island Real Estate
While GLPI didn’t make a firm commitment to assisting Bally’s in Chicago, the REIT made clear it would like to own the real estate of the gaming company’s namesake Lincoln, RI venue. Gaming and Leisure already owns the property associated with Bally’s Tiverton Casino & Hotel.
“I think that asset, Lincoln as an asset, is one that we’ve always looked at as a premier property in that region. We believe that Bally’s, as well as other gaming operators look at it as a premier property in that region, and it’s one that, of course, we would want to own,” said Vice President Steven Ladany in response to an analyst question
Gaming and Leisure Properties’ New England footprint consists of the Tiverton venue, the Hollywood Casino Hotel in Bangor, Maine and Plainridge Park Casino in Plainville, Mass. — both of which are operated by Penn Entertainment (NASDAQ: PENN).
