According to a gaming industry analyst, cash-strapped Bally’s Corporation could look to sell the land on which the Tropicana Las Vegas sits now that the casino is closed. CBRE Credit Research VP of Credit Research Colin Mansfield said in a Monday investor report that Bally’s could be willing to part with the land to fund its ambitious casino project in Chicago.
Bally’s already has a temporary casino in Chicago, but faces an $800 million shortfall to pay for the permanent casino resort, which has already been relocated once to because its original plan risked damaging city water lines.
The company does not actually own the Tropicana land. That distinction belongs to real estate investment trust Gaming & Leisure Properties, Inc. (GLPI), which leases it to Bally’s for $10.5 million.
Of course, with the Tropicana closed and on its way to complete non-existence, Bally’s paying rent for nothing. But that doesn’t mean it’s not an investment.
“It is a net-negative carrying asset for Bally’s, but the attractiveness and potential value of the site has gone up since the time of purchase, in our opinion,” Mansfield said.
“In its (third-quarter 2023) earnings call, management expressed its willingness to sell,” he added in his report, “stating ‘at the right price they would unload anything,’ when speaking to the option of the Tropicana site.”
In the meantime, GLPI has given nine acres of the Tropicana land to be used for the site of upcoming stadium for the MLB’s Oakland Athletics, who will leave Oakland after this season. The franchise is moving to Las Vegas, but since stadium construction won’t begin until next year, the team will call a minor league stadium in Sacramento home for the 2025-2027 seasons.
Odds are, the stadium construction and the A’s relocation will proceed as planned, but a local Las Vegas group, Schools Over Stadiums, is fighting to prevent the state from providing $380 million in funding.
Bally could get a cash injection by selling the company to hedge fund Standard General, which offered to buy the casino company about a month ago for $15 per share, or about $648 million. Standard General’s founding partner is Soo Kim, who is also Bally’s Chairman of the Board. Standard General bid $38 per share in 2022.
Bally’s shareholder K&F Growth Capital has blasted the offer, urging the Board to reject the deal.