Bally’s Corporation has announced that it has agreed to purchase Tropicana Las Vegas, complementing a March revenue acceleration that it says sets the stage for a strong year.
The operator, which earlier today announced that it agreed on definitive terms to undertake a business combination with Gamesys Group, estimates that consolidated revenue and adjusted EBITDA for the three months to March 31, 2021, was greater than $185m (2020: $109.1m) and $50m (2020: 22.1m) respectively.
In a preliminary financial report, Bally’s put this down to an accelerated month-on-month performance in March as more COVID-19 restrictions were relaxed across the country.
George Papanier, president and CEO of Bally’s Corporation, said: “We are extremely encouraged by our trends and March numbers. Increased demand assisted by a relaxation of COVID-19 restrictions contributed to outstanding performance toward the end of the quarter, which, based on early indications, has continued into April.
“We believe this combination of factors will set us up for a strong 2021 as we continue to welcome more and more Bally’s customers back to our casinos, as well as enhance our igaming platform.”
Furthermore, Bally’s has also expanded its partnership with Gaming and Leisure Properties regarding a sale-and-leaseback transaction relating to Bally’s Black Hawk, Colorado, and Rock Island, Illinois, casino properties for a cash purchase price of $150m. The lease will have initial annual fixed rent of $12m.
Bally’s also plans to acquire both GLPI’s non-land real estate assets and Penn National Gaming’s outstanding equity interests in Tropicana Las Vegas Hotel and Casino for an aggregate cash acquisition price of $150m. The REIT will retain ownership of the land and will concurrently enter into a 50-year ground lease with initial annual rent of $10.5m.
In addition, Bally’s has granted GLPI a right of first refusal to fund the real property acquisition or development project costs associated with any and all potential future transactions in Michigan, Maryland, New York and Virginia, through one or more sale-leaseback or similar transactions for a term of seven years.
Peter Carlino, chairman and CEO of GLPI, commented: “We are delighted to expand our relationship with Bally’s through a complex transaction that is a win-win for both companies. With strong rent coverage and an accretive cap rate, the transaction again expands and diversifies our master lease through the addition of Bally’s properties in Rock Island, IL and Black Hawk, CO.
“We are also excited to have secured rights of first refusal on potential future assets. Furthermore, our conversion of the Tropicana into an income producing ground lease solidifies the value creation that we hoped for in originally structuring the transaction with Penn National.”
The Tropicana Las Vegas Hotel and Casino is on a 35-acre parcel and includes 1,470 guest rooms, 50,000 square feet of casino space with 1,000 gaming positions, a 1,200 seat performance theater and 100,000 square feet of convention and meeting space.
The transaction is expected to close in early 2022, subject to customary real estate and working capital adjustments, receipt of required regulatory approvals and other customary closing conditions.
