Expected buyer of Tropicana operations reverses first-quarter losses

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The Providence, Rhode Island-based company set to buy operations at the Tropicana suddenly has a lot on its plate.

A year ago, Bally’s Corp., which owns a racetrack in Colorado and 14 casinos, including one in Lake Tahoe, offered to buy the Tropicana’s business for $308 million from real estate investment firm Gaming & Leisure. Bally’s Properties Inc., which was also named the winning bidder for the Chicago single-gaming license on Thursday, is completing plans for the Tropicana, currently operated by Penn National Gaming.

“We’ve been saying for a long time that we have a very large lending bank that we’re going to leverage for significant strategic opportunities for the business,” Bally CEO Lee Fenton said on a Thursday morning conference call with investors. . “I think we can do it for Chicago if we win this offer and I think the same goes for Tropicana.”

The call took place before Chicago’s announcement.

Fenton said he was still not ready to provide details on the Tropicana’s plans. During the company’s fourth-quarter earnings call in February, he also remained silent on specifics.

But since February, Gaming & Leisure Properties chairman, chairman and chief executive Peter Carlino said during his company’s earnings call on Monday that representatives of his company and Bally’s met in April with representatives of Oakland A regarding the possibility of locating a Major League Baseball stadium at the 35-hectare Tropicana site. It was unclear if and how the station would be redesigned with a stadium.

Bally’s – which is not affiliated with the Strip resort of that name – reported revenue more than tripling and reversing a net loss in the quarter that ended March 31. The company reported net income of $1.9 million, 3 cents per share, on revenue of $548.3. million. For the same quarter a year earlier, Bally’s posted a net loss of $10.7 million, 30 cents per share, on revenue of $182.3 million.

Fenton said lifting mask mandates and allowing smoking at the company’s Rhode Island properties drove the highest revenue performance since 2019.

Bally’s opened its sports betting operations in Arizona on Wednesday, building on partnerships with the Women’s National Basketball Association Phoenix Mercury and Major League Baseball’s Arizona Diamondbacks.

Fenton said the company is keeping a cautious eye on sports betting operations in New York due to the high tax environment and the company plans to enter the Ontario, Canada market this summer.

“In the second half (of 2022), we will focus on states where there are great casino opportunities, or where we anticipate there will be great casino opportunities in the near term,” Fenton said.

The company also recently signed a marketing agreement with the National Football League Cleveland Browns, bringing the company to 18-state markets.

Internationally, Fenton said double-digit percentage increases in Asia offset slumping markets in Britain for the quarter.

Bally shares, traded on the New York Stock Exchange, fell $1.36, 4.5%, in heavy midday trading Thursday.

This is a developing story. Check back for updates.

Contact Richard N. Velotta at [email protected] or 702-477-3893. To follow @RickVelotta on Twitter.

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