Bally’s Corporation is among the leading gaming operators in the United States. It disclosed last week in its third-quarter earnings call that it is ready to sell its Tropicana Las Vegas lease. The company currently runs the gaming property on the southeast of Las Vegas Blvd and Tropicana Avenue.
It sits on a nine-and-a-half-acre parcel of land and the Oakland A’s are interested in constructing a Major League Baseball (MLB) baseball stadium there. The team is planning to move to Las Vegas soon.
The MLB ballot might happen soon. The A’s require approval before constructing the stadium.
Yet, Bally’s isn’t planning to develop Tropicana now. The company’s President, George Papanier stated in the earnings call that they won’t make reinvestment announcements before knowing their plans’ outcome. Nevertheless, the distinct proposed development project excites them as it offers great strategic opportunities.
Bally’s Decision to Sell Tropicana
Brandt Montour, Barclay’s Equity Research Analyst Director asked during the call if Bally’s would sell its lease, form liquidity to finance its projects, or buy equity. Marcus Glover, Bally’s Chief Financial Officer and Executive Vice President said in response that selling Tropicana at the right price would create the required liquidity.
He added that Bally’s traded in the deal with some of its properties to get the lease. The executive explained that they are willing to accept an offer that values the land at $9 million or more per acre.
Also, they don’t mind another company developing the land since they aren’t planning to use it now. Glover reiterated that Bally’s is open to receiving offers but hasn’t decided to sell its Tropicana lease now.
What Is Tropicana’s Fate?
Bally’s Corporation paid almost $150 million in 2021 when it bought Tropicana Las Vegas. It ended the transaction in 2022 and got the 50-year lease to run it or another casino on the land in the future.
The A’s gave an update on its relocation to Las Vegas several days ago. Gaming analysts claim that the team’s estimated timeline will prompt Bally’s to disclose more about Tropicana’s future. But MLB has to give the A’s the green light soon.
Even so, the A’s stadium project on part of the land will not start immediately since the team has to issue Bally’s Corporation with a one-year notice first. Therefore, the A’s can provide it this year or early next year.
Rumors claim that Bally’s will demolish Tropicana Las Vegas and construct a hotel and casino. This might occur before late 2024 or early 2025 when the A’s might start building its stadium. But Bally’s can opt to sell the lease rather than reinvest on the land.
It is uncertain that a specific gaming company will be ready to buy the Tropicana lease. The A’s stadium project will increase its value hence making it economically unviable for some casinos.
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