Penn National's Approval to Acquire Tropicana Las Vegas Ensures Its Survival
The Tropicana Las Vegas has regained its stability and is nearly out of intensive care, thanks to Penn National Gaming's successful bid to acquire this infamous city landmark.
Penn National, who currently holds the debt on and manages the M Resort on the South Las Vegas Strip, has been open about their desire to purchase properties on the more central part of the Strip. Their dream came true this week as the Nevada Gaming Commission unanimously approved their $360 million takeover of the Tropicana.
"Acquiring the Tropicana Las Vegas is an exciting milestone for Penn National," said CEO Timothy Wilmott. "It meets our long-term objective of purchasing the ideal resort at an attractive price on the Las Vegas Strip."
The transaction is expected to be completed on August 25th, making the Tropicana the 27th casino operation under Penn National's control.
A Bargain Buy
When you're talking about the gambling industry, $360 million is a small sum. Wilmott even called it "an affordable deal." And to top it off, the 1,500-room hotel and 50,000 square-foot casino is in surprisingly good shape, according to Wilmott's statement to the Gaming Commission.
The property has received over $200 million in upgrades since 2011, and Penn has plans to invest an additional $20 million in improvements within the year—such as integrating their player loyalty program.
Nothing but Success
Founded in the early 1970s, when it once operated a single horse racecourse in Grantville, Pennsylvania, Penn National transformed from a racing company to a casino juggernaut in 2003 after acquiring the Hollywood Casino.
Within the last decade, Penn has acquired several other gaming companies and, almost acquired Harrah's. Despite their success in regional gambling and expanding their brand around the nation, their ultimate goal of owning property in Las Vegas's central district remained steady.
"Our local guests have been asking us for years to provide a world-class destination on the Strip," Wilmott said. "After a thorough search, we believe the iconic Tropicana Las Vegas is the right fit to meet the demand."
Although the upmarket M Casino is technically on the Strip, its location at the far south of the Strip makes it more of a local preference.
No Need to Renovate the Tropicana
Though Penn National usually rebrands acquired casinos under their Hollywood name, that won't be the case for the historical Tropicana. Wilmott announced before the Gaming Commission hearing on Thursday that the company would not change the Tropicana's name.
There were also concerns about potential confusion due to close proximity with neighboring Planet Hollywood and the single casino, MGM Grand, in between. Keeping the Rat Pack-associated venue named Tropicana is likely to be appreciated by both locals and tourists, as Las Vegas has seen quite a few changes in recent years, including the closure of the iconic Riviera.
And Penn National might have learned from past mistakes, such as the costly revamp of the former Sahara into an unsuccessful SLS Las Vegas.
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Source: www.casino.org
