{"id":325267,"date":"2024-07-15T17:40:27","date_gmt":"2024-07-15T22:40:27","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=325267"},"modified":"2024-07-16T10:10:51","modified_gmt":"2024-07-16T15:10:51","slug":"ballys-chicago-deal-could-be-playbook-for-tropicana-las-vegas","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/ballys-chicago-deal-could-be-playbook-for-tropicana-las-vegas\/","title":{"rendered":"Bally\u2019s Chicago Deal Could Be Playbook for Tropicana Las Vegas"},"content":{"rendered":"

Last Friday, Bally\u2019s (NYSE: BALY) unveiled a broad agreement with Gaming and Leisure Properties (NASDAQ: GLPI) under which the real estate investment trust (REIT) will provide much-needed financing for the gaming company\u2019s permanent Chicago casino. At least one analyst believes the accord could be instructive regarding how Bally\u2019s proceeds in Las Vegas.<\/p>\n

\"Tropicana
The Tropicana Las Vegas. An analyst said Bally’s Chicago agreement with GLPI could be applied to the Las Vegas property. (Image: New York Times<\/em>)<\/figcaption><\/figure>\n

In a note to clients, Truist Securities analyst Barry Jonas said the Chicago deal between Bally\u2019s and GLPI<\/a> could act as a playbook for how the operator moves forward with its operating rights on the shuttered \u00a0Tropicana Las Vegas. GLPI owns the real estate at that site.<\/p>\n

If this Gaming and Leisure-owned, Bally\u2019s-operated Chicago structure succeeds, we could see this being a template for developments on the Tropicana Las Vegas site,\u201d opined Jonas.<\/p><\/blockquote>\n

Tropicana closed in April and is scheduled to be demolished in October. The land previously occupied by the casino hotel is intended to become a $1.5 billion baseball stadium for the Oakland Athletics (A\u2019s), but there are currently more questions than answers regarding the team\u2019s ability to execute the move<\/a> to Las Vegas.<\/p>\n

How Bally\u2019s, GLPI Could Apply Chicago Deal in Las Vegas<\/h2>\n

As things stand today at the Tropicana, GLPI owns the real estate, Bally\u2019s controls the gaming rights, and the operator is paying $10.5 million in annual rent to the REIT.<\/p>\n

\n

Jonas didn\u2019t get into the mechanics of exactly how GLPI could assist Bally\u2019s in Las Vegas, but using the Chicago agreement as a potential template, the landlord could, in the future, provide the gaming company with the financing needed to develop a new casino resort at that site. That would also likely include a rent escalator.<\/p>\n<\/div>\n

For its part, Bally\u2019s said earlier this year it\u2019s not rushing Tropicana<\/a> redevelopment plans, and that could be a pragmatic approach because financing for Las Vegas plans or any other expansion efforts by Bally\u2019s would likely be expensive. In Chicago, GLPI will \u201cfund construction hard costs of up to $940 million at an 8.5% initial cash yield.\u201d<\/p>\n

Some Bally\u2019s shareholders have suggested that the operator sell its operating rights on the Tropicana because there would likely be an extensive list of bidders, particularly if the A\u2019s move is scrapped, and because the seller could use that capital to reduce its hefty debt burden.<\/p>\n

GLPI Has Chicago Options if Bally\u2019s Defaults<\/h2>\n

Bally\u2019s sports junk credit ratings<\/a> as a result of a debt\/earnings before interest, taxes, depreciation, and amortization (EBITDA) above 7.5x. Should the operator default on its Chicago obligations, Jonas believes GLPI could rapidly find a replacement.<\/p>\n

\u201cIn a downside case where BALY has to exit Chicago, we believe there would be demand from other well-established operators to take over at comparable terms,\u201d added the analyst.<\/p>\n

\n

Hard Rock International and Rush Street Gaming were the other contenders for the lone Chicago casino license. Regarding GLPI, the REIT is seen as having the financial resources to pull off the Chicago financing as well as paying $395 million to Bally\u2019s for the real estate of Kansas City and Shreveport, La. gaming venues.<\/p>\n<\/div>\n

\u201cWe recently cited GLPI\u2019s underlevered balance sheet and they should have some funding flexibility for these transactions, benefiting from an improving capital market environment,\u201d concluded Jonas.<\/p>\n","protected":false},"excerpt":{"rendered":"

Last Friday, Bally\u2019s (NYSE: BALY) unveiled a broad agreement with Gaming and Leisure Properties (NASDAQ: GLPI) under which the real estate investment trust (REIT) will provide much-needed financing for the gaming company\u2019s permanent Chicago casino. At least one analyst believes the accord could be instructive regarding how Bally\u2019s proceeds in Las Vegas. In a note […]<\/p>\n","protected":false},"author":46,"featured_media":293784,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10,81886,1],"tags":[81897,81903,23,81967],"acf":[],"yoast_head":"\nBally\u2019s Chicago Deal Could Be Playbook for Tropicana Las Vegas<\/title>\n<meta name=\"description\" content=\"Bally\u2019s Chicago Deal Could Be Playbook for Tropicana Las Vegas.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/ballys-chicago-deal-could-be-playbook-for-tropicana-las-vegas\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bally\u2019s Chicago Deal Could Be Playbook for Tropicana Las Vegas\" \/>\n<meta property=\"og:description\" content=\"Bally\u2019s Chicago Deal Could Be Playbook for Tropicana Las Vegas.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/ballys-chicago-deal-could-be-playbook-for-tropicana-las-vegas\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2024-07-15T22:40:27+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-07-16T15:10:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/10\/Trop.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"562\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/ballys-chicago-deal-could-be-playbook-for-tropicana-las-vegas\/\",\"url\":\"https:\/\/www.casino.org\/news\/ballys-chicago-deal-could-be-playbook-for-tropicana-las-vegas\/\",\"name\":\"Bally\u2019s Chicago Deal Could Be Playbook for Tropicana Las Vegas\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/ballys-chicago-deal-could-be-playbook-for-tropicana-las-vegas\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/ballys-chicago-deal-could-be-playbook-for-tropicana-las-vegas\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/10\/Trop.jpg\",\"datePublished\":\"2024-07-15T22:40:27+00:00\",\"dateModified\":\"2024-07-16T15:10:51+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Bally\u2019s Chicago Deal Could Be Playbook for Tropicana Las Vegas.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/ballys-chicago-deal-could-be-playbook-for-tropicana-las-vegas\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/ballys-chicago-deal-could-be-playbook-for-tropicana-las-vegas\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/ballys-chicago-deal-could-be-playbook-for-tropicana-las-vegas\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/10\/Trop.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/10\/Trop.jpg\",\"width\":1000,\"height\":562,\"caption\":\"The Tropicana Las Vegas. 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