Indy Gaming: Analyst says A’s stadium project could prop up Bally’s
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One gaming analyst believes the relocation of the Oakland Athletics to Las Vegas will boost the region’s entertainment offerings.
But the baseball team’s move would also provide another financial lift for casino company Bally’s Corp.
The Rhode Island-based company, which leases the operations of the Tropicana, says it will demolish the aging hotel-casino on a 35-acre south Strip site ahead of construction of the planned 33,000-seat, $1.5 billion ballpark, which would sit on 9 acres.
That leaves 26 acres for Bally’s to build another resort or a mixed-use development. The A’s and Bally’s have said additional space could be provided to the ballclub to be used as a plaza area for the stadium.
The initial designs for the ballpark released in May included a retractable roof and a stadium footprint that appeared to take up much of the Tropicana site. The team has since scrapped those renderings and is expected to publicly unveil new designs in December.
Macquarie Securities gaming analyst Chad Beynon told investors in a Nov. 17 research note that the unanimous relocation vote by Major League Baseball owners in favor of the A’s move to Las Vegas was a “positive development” for Bally’s as it provided the company with clarity as to the future of the Tropicana.
Bally’s pays real estate investment trust Gaming and Leisure Properties (GLPI) $10.5 million annually to lease the site through a 50-year agreement. The company held off making any operational changes to the 63-year-old Tropicana until after the owners’ vote.
“We believe clearing this hurdle will now allow management to assess the various paths forward for the redevelopment of the property, which could include building a large resort [or] finding a partner,” Beynon told investors.
Bally’s still has time to decide what to do with the site. The demolition won’t take place until the A’s fulfill various development agreements and stadium designs are approved and signed by several Clark County departments and the Las Vegas Stadium Authority. Also, the Federal Aviation Administration (FAA) will need to green light the project because of its proximity to Harry Reid International Airport.
Based on the proposed three-year construction timeline, the Tropicana site needs to be demolished and cleared by April 2025. That timeline is necessary to have the park built and ready for operations by the start of the 2028 Major League Baseball season.
Beynon told investors that a baseball stadium on the Strip “represents an incremental catalyst for Las Vegas as a whole that will bolster the entertainment draw of the city.” It also helps MGM Resorts International, which has five properties totaling more than 13,000 rooms directly across from the stadium’s future site.
Bally’s has other issues to contend with.
Earlier this month, taxable revenue from a temporary casino Bally’s opened in Chicago was falling well short of a projected $12.8 million. According to a report by Play Illinois, the revenue collection through three weeks in September and all of October was just $1.5 million.
The temporary casino is expected to be replaced by a $1.7 billion permanent resort in 2026.
Beynon said Bally’s executives aren't showing any concerns about the company’s prospects. He cited a Bloomberg report indicating that several company insiders, including CEO Robeson Reeves and President George Papanier, had acquired $760,000 of company stock this month when it was trading at $9.33 a share. Bally’s shares closed Tuesday at $11.35 on the New York Stock Exchange.
“We view insider purchases as one of the strongest signs of confidence in the business,” Beynon wrote.
ESPN to fund responsible gaming research effort by UNLV institute
ESPN, which launched a $1.5 billion, 10-year deal with Penn Entertainment for a legal sports betting app this month in 17 states, announced a collaboration with UNLV’s International Gaming Institute (IGI) to study responsible sports betting practices and an analysis of media impact.
The effort comes amid the expansive growth in sports betting over the past five years, taking the regulated activity to 37 states and Washington, D.C. Wagering operators have spent billions of dollars on advertising and customer acquisition efforts. Nevada is not one of the states where the sports betting app is available.
“The growth of betting and gambling subjects in U.S. media have exploded in the past five years,” UNLV IGI Executive Director Brett Abarbanel said in a statement. “So, too, have the calls for extended research and thought leadership alongside this proliferation of content.”
ESPN is donating $200,000 toward the initiative, which will support personnel, scholarly research, global outreach efforts and operational needs.
Research topics include enhancing responsible gaming programs, developing new efforts, parameters and practices and educating gaming industry leaders. A timeline for the study’s completion was not disclosed.
In August Penn ended its three-year relationship with Barstool Sports in favor of the ESPN agreement, which launched Nov. 14 with a hefty advertising campaign spearheaded by SportsCenter anchors Scott Van Pelt and Elle Duncan.
“[The launch] appears to be going well with the app ranking in the top one-to-three most downloaded apps for iPhone each day,” Macquarie Securities gaming analyst Chad Beynon wrote in a Nov. 21 research note. “While initial state gaming revenue reports will be out in early December, we think it will take at least a few months to get a better depiction of a normalized market share.”
ESPN Vice President Kevin Martinez said the company funded the study as a way of “ensuring that the world of sports betting is not only entertaining but also responsible.”
News, notes and quotes
Analyst: Slot maker AGS could be a merger candidate
Over the past year, Las Vegas-based gaming equipment provider AGS has been rumored as an acquisition target. Following an investor meeting with the company’s Investors Relations Vice President Brad Boyer, Truist Securities gaming analyst Barry Jonas addressed the issue in a research note.
Jonas said the company has been buying back stock to help reduce its debt, which stood at $568.3 million at the end of September. That activity is the current priority.
“[Mergers and acquisitions] has a higher bar given current capital market conditions, with management noting that consolidation could make sense across the industry,” Jonas wrote. “We think AGS could potentially be an attractive strategic acquisition candidate given its strong [tribal casino slot machine] business.”
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Penn breaks ground on Illinois hotel; no word on M Resort expansion
Penn Entertainment held a groundbreaking ceremony Tuesday for a $100 million hotel expansion at its Hollywood Casino in Columbus, Ohio. There was no mention of when a planned $206 million expansion at M Resort, announced more than a year ago, would begin.
“The addition of a hotel at Hollywood Casino Columbus will create a true regional destination,” Penn CEO Jay Snowden said in a statement.
The proposed M Resort expansion would add a second 378-room hotel tower, additional meeting space and other amenities to the Henderson casino. Real estate investment trust Gaming and Leisure Properties has committed as much as $575 million toward the overall $850 million budget for the company’s four development projects, which include two Illinois casinos.
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Mohegan’s South Korea resort opens Thursday, casino to follow in 2024
Mohegan Gaming, which operates the Mohegan Casino inside Virgin Hotels Las Vegas, is opening the Inspire Entertainment Resort in Incheon, South Korea, on Thursday. Mohegan Gaming is the business arm of Connecticut’s Mohegan Indian Tribe.
The South Korean property will include 1,275 hotel rooms, convention facilities and several restaurants as part of a soft opening. The Inspire casino, which will only be accessible to non-South Korean citizens, will open next year.