2019 saw several casinos across the U.S. change hands, most notably with MGM International Resorts looking to lighten its portfolio and Eldorado Resorts and Caesars Entertainment working diligently on a merger. These series of negotiations were just the beginning, though, and analysts predicted that even more consolidation and property shuffling could take place in 2020. It didn’t take long for that prediction to find a foothold, as Penn National might be considering an offer for the iconic Tropicana Las Vegas property.
Vital Vegas, who somehow manages to know what’s going on in Vegas even before Vegas knows, reports that a Tropicana sale is “imminent.” Penn National had received unsolicited bids last year and wasn’t ready to make a deal then. However, if Vital Vegas is correct, one of the bids may have caught the company’s attention and has now been accepted, with a sale currently taking place.
The deal is said to be worth over $700 million. Considering the fact that Penn paid $360 million five years ago when it purchased the property from Onex Corp., it’s a nice return on investment (ROI). It will also go a long way toward helping Penn reduce its outstanding debt, which currently hovers around $11 billion.
As is typically the case with sensitive deals, Penn National won’t offer any details or even confirm whether or not something is in the works. Casino.org tried to get some type of confirmation from the company, but its SVP for Public Affairs, Eric Schippers, would only say, “Unfortunately, we are unable to comment on rumors or market speculation.”
The ROI on the potential sale is driven by more than just standard annual valuation increases. This year is expected to be better than 2019 and all types of gaming analysts and expert number-crunchers are expecting a surge of activity in Las Vegas as the year rolls on. Frank Schreck, a gaming attorney with a solid history in Vegas, explained via the Las Vegas Business Press (LVBP), “I’m more optimistic about 2020 than I was when I talked about 2017, 2018 and 2019. It seems like 2017 was starting to come back to normal, 2018 improved some more, and 2019 was back to the 2007 level.”
For what it’s worth, the LVBP is owned by the Las Vegas Review-Journal, which is owned by Sheldon Adelson (even though his attorneys deny it), the man behind casino giant Las Vegas Sands. Schreck isn’t the only one to be positive on the Vegas outlook, though, as the Nevada Gaming Control Board’s own senior research analyst, Michael Lawton, sees good things coming. He estimates that gross gaming revenue in the city will have increased between 1-1.5% year-on-year by the end of 2020.
