Penn National Almost Officially Approved to Buy Tropicana Las Vegas
Posted on: August 7, 2015, 12:55h.
Last updated on: August 7, 2015, 01:11h.
Penn National has moved one step closer to acquiring the Tropicana Las Vegas in a $360 million deal, following a preliminary regulatory green light in Nevada.
A.G. Burnett, head of the state’s Gaming Control Board, declared the deal to be for “the good of the state and the Strip,” as he signaled his approval for Penn National’s plans.
The operator expects to plow $200 million into improving the property in its first four years of ownership.
The best news, however, is that the Tropicana will not be rebranded as one of Penn National’s “Hollywood” casinos, keeping alive a link to Rat Pack-era Vegas that is fast disappearing from Sin City, following the demise this year of the Riviera, as well as the Stardust, Desert Inn, Dunes, and New Frontier in recent years.
“There is not a lot left of the hotel from when it first opened because of expansions, but it’s good for the city that we will still have the name Tropicana,” David Schwartz, director of the Center for Gaming Research at the University of Nevada, told the Las Vegas Review-Journal, following the announcement of the proposal in April.
The continued survival of a casino with 1,500 mid-priced hotel rooms is also a positive for the city’s economy. The Tropicana’s average room rate of $154 per night will, according to Goldman Sachs gaming analyst Steven Kent, “likely resonate with the typical regional gaming customer who wants a fun weekend in Las Vegas but may not be willing or able to pay the rates charged by the higher-end properties.”
The Tropicana was one of Las Vegas’ most lavish and expensive casinos when it opened on April 4, 1957. Eddie Fisher provided the entertainment at an opening night party that was attended by the then-Mrs. Eddie Fisher, Debbie Reynolds, as well as Dean Martin, Groucho Marx, and Nat King Cole.
Over the years, everyone from Benny Goodman to Jack Benny, and from Sammy Davis Jr. to Louis Armstrong have graced the iconic casino’s stage. The Tropicana even gave Siegfried and Roy their Las Vegas debut, and played host to the city’s longest-running revue show, the Folies Bergere, which ran for an extraordinary 49 years before the girls finally decided to put their clothes back on for good in 2009.
And of course, the Mob occasionally popped up to skim profits from the casino floor. In fact, no establishment left in the city can claim to have more “old-school Vegas” credentials.
Despite its auspicious beginnings, the Tropicana’s glamor had faded in recent years. In comparison with many of its Strip neighbors that rose in the eighties and nineties, it became a distinctly creaky, lower-end resort. It was declared bankrupt in 2008 at the height of the economic downturn and bought out by its creditors, the Onex Corporation.
Penn National is one of the fastest-growing casino groups in the US, and the deal is expected to be a hugely positive one for both Las Vegas and the Tropicana’s legacy. And for its new owners, this will be its second Las Vegas casino, having bought out the debt of the M Resort and Casino on the South Strip back in 2010.
The company’s first move following acquisition, COO Jay Snowden told the Gaming Control Board, will be to spend $20 million on integrating its database from its 26 properties across America into the Tropicana’s.
“We believe we can improve the gaming experience on the floor,” Snowden said. “Once the database has been updated, we can invite our players to visit the Tropicana.”
The Nevada Gaming Commission will offer an official decision on the deal August 20.
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