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Will the Tropicana Be the First Vegas Casino Sale of 2020?
Las Vegas is a small town, but unlike other small towns, it cannot engage in standard gossip. After all, peccadillos and venial sins are what keep the Las Vegas lights on. It would be gauche to talk of such things. What happens in Vegas, as they say, stays in Vegas.
But whatever informal omerta Las Vegas observes concerning the doings of its guests, it has no such compunctions when it comes to speculating about the ever-changing ownership status of the casinos and resorts that power the city.
The latest casino to fall victim to the Las Vegas rumor mill is a perennial favorite: the Tropicana Las Vegas. Not quite a week into the new year, the website and twitter phenom VitalVegas disclosed that several of its sources had indicated the sale of the Tropicana was “imminent.”
Now, rumors of a sale have been circulating about the so-called “Tiffany of the Strip” resort casino since at least last year, but few have specified a time frame.
In October 2019, for example, a gambling industry analyst told Casino.org that during a meeting with the Tropicana’s owner, Penn National Gaming, Inc. (PNG), the possibility of a sale of the 1400-room hotel was mentioned. According to the article, management said that “[PNG] has recently seen interest from a number of different parties regarding the [Tropicana’s] assets and accompanying land.”
A statement like that can certainly turn up the volume on the Tropicana sale rumor from “idle” to “eleven.”
Previous Tropicana Las Vegas Sales
The Las Vegas Review-Journal also confirmed that in October 2019—during a PNG conference call—the company acknowledged that it had received unsolicited offers from several entities. The company said it was considering such a sale as one of its options with which to reduce PNG’s reported $11 billion debt. Managers at PNG were quick to point out at the time, however, that no sale was “imminent.”
Perhaps. It is, after all, theoretically possible that this is the one time in the Tropicana’s history that its sale was not imminent. In fact, wagering against an imminent sale of the Tropicana at any given moment during the past 60 years could be considered a contender for the ultimate sucker’s bet.
Between 1957—when it first opened its doors—and 2015, the Tropicana was owned by at least eight different entities, from heiress Mitzi Stauffer Briggs to mob-linked Deil Otto Gustafson, from Ramada Inns to Trans-Texas Airways. To that group we can also add Carl Icahn and, of course, Eldorado Resorts. It is hardly hyperbolic to claim that virtually everyone in Las Vegas, at one time or another, has owned the Tropicana.
Reasons for the endless changes in ownership vary widely. In more than one case, connections to organized crime forced a sale; in other cases, overly ambitious expansion plans were the culprit. And in at least one case, ownership of the Tropicana was taken over by angry creditors.
In that last case, the resort’s current ownership, Penn National Gaming, Inc. purchased the Tropicana in 2015 from its erstwhile creditors—primarily the Onex Corporation and former MGM Mirage CEO Alex Yemenidjian.
Each of the owners left a mark on the Tropicana, whether it was a “tiffany glass” arch over the gambling pit or imploding one hotel tower and building a different hotel tower. Through all the changes of proprietorship and profile, the Tropicana has abided, providing hospitality and gaming to hundreds of thousands of visitors each year from its enviable location at the corner of Las Vegas and Tropicana—the very heart of the Vegas Strip.
Who’s Going to Buy the Tropicana Next?
Speculation—wild-eyed or otherwise—says that there are several companies that might have more than a passing interest in buying the Tropicana.
Casino.org fancies various publicly traded casino operators such as Boyd Gaming, Monarch Casino & Resort, Inc., and the Rhode Island-based Twin River Worldwide Holdings, Inc. as potential suitors. Why? Well, why not? Shouldn’t everybody get their chance to own the Tropicana?
Or PNG may take the same tack as MGM and Caesars Entertainment did recently with the Bellagio and Caesars Palace, respectively—a real estate investment trust (REIT), essentially selling the Tropicana to a holding company and then leasing back the hotel and continuing to operate it as before.
The REIT option has recently proven quite popular among a number of casino industry giants since it allows the operator to shuffle off building maintenance and other asset costs (which they don’t teach much of in hospitality management courses) and concentrate on what they are trained and experienced to do—manage a resort casino’s business.
If PNG were to exercise the REIT option, it will probably do it with Gaming and Leisure Properties, Inc. (GLP), a 2012 spin-off from PNG that actually introduced the gaming world to REITs. GLP already owns the land and other real assets of most of Penn National’s array of gaming properties across the country.
While GLP owns a stake in Tropicana Entertainment, the Tropicana Las Vegas was excluded from the 2018 purchase of other Tropicana properties by GLP and Eldorado Resorts. This might be an opportunity to bring Tropicana Las Vegas back into the fold.
For more updates about happenings in Las Vegas as well as in the wider gambling world, keep tabs on our blog.