Indy Gaming: Bally’s may go private to deal with debt. Will it affect Vegas stadium?
The chairman of Bally’s Corp. wants to take the casino company private. What could this mean for the A’s stadium given its involvement? Also, a Laughlin casino is facing a $500,000 fine from gaming regulators after members of its security team roughed up an employee and customer. Meanwhile, wagering in March Madness could top $2.7 billion nationwide.
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For Bally’s Corp., the balance sheet doesn’t look good.
The company, whose 16 casinos include the Tropicana Las Vegas and Bally’s Lake Tahoe in Nevada, is carrying more than $3.6 billion in long-term debt, suffered a net loss of $172.6 million in 2023 and is facing an $800 million shortfall in its agreement to build a $1.7 billion casino resort in downtown Chicago.
Company chairman Soo Kim said he believes taking the gaming business private might help solve those problems. By taking the company off the stock markets and out of the hands of investors, quarterly financial results would no longer be reported and the company might have more flexibility because it wouldn’t have to answer to stockholders.
Last week, Kim’s New York City-based Standard General hedge fund, which is Bally’s largest stockholder with 23 percent of the outstanding shares, offered to purchase the Bally’s stock it doesn’t own at $15 per share — 41 percent higher from the previous day’s closing price. The proposed deal valued Bally’s at $2 billion.
Bally’s 16 casinos are in 10 states and it has a growing online gaming and sports betting business.
But let’s address an immediate concern: Bally’s future role in the proposed $1.5 billion baseball stadium on the south end of the Strip currently housing the Tropicana that would become home of the relocated Oakland Athletics.
The 67-year-old Tropicana will close April 2 ahead of a planned demolition allowing the A’s to utilize 9 acres of the 35-acre parcel for the stadium. Bally’s wants to develop the rest of the parcel surrounding the ballpark, but the plans are yet to be determined.
But the true force in the stadium scenario is real estate investment trust Gaming and Leisure Properties, which owns the 35 acres. Bally’s currently leases the site for $10.5 million a year, but that agreement is expected to be adjusted once the building is padlocked and demolished.
In other words, if Bally’s can’t participate in the stadium site, Gaming and Leisure could terminate the lease and find another partner.
Gaming and Leisure has committed $175 million toward the Tropicana’s demise and might consider additional funding.
Kim has supported a baseball stadium for the Tropicana site and was quoted in an A’s press release that accompanied renderings that the ballpark was “a once-in-a-generation project.”
Kim is credited with much of Bally’s transformation from a small Rhode Island casino operator to a national profile. He engineered the $20 million purchase of the Bally’s trademarks from Caesars Entertainment in 2020.
Standard General was the leading creditor that took control of Aliante Station in the 2011 bankruptcy reorganization of Station Casinos. The casino was sold to Boyd Gaming in 2016 for $316 million.
Bally’s said it would appoint a special board committee to consider the offer. Jefferies Financial gaming analyst David Katz wrote in a research note last week that Bally’s mixed results in regional markets and large debt concern the company’s investors.
“In our view, Standard General’s current offer to purchase Bally’s has a reasonable chance of success,” Katz wrote.
Stifel Financial gaming analyst Jeffrey Stantial had a differing view.
“We believe the special committee and/or remaining shareholders may be reluctant to approve the offer as structured,” he wrote.
Laughlin casino faces $500,000 fine for unreported use of force incidents
The Riverside Resort in Laughlin has agreed to pay a $500,000 fine to state gaming regulators — one of the larger penalties the board has handed down recently — to settle a two-count complaint after several of the casino’s security officers used excessive force during two incidents at the property in 2022.
Both incidents, which took place two months apart, were not reported to the Nevada Gaming Control Board by Riverside officials, which violated state gaming regulations. The incidents resulted in criminal charges filed against the officers.
The Nevada Gaming Commission is expected to vote on accepting the settlement at its meeting Thursday in Las Vegas.
One incident involved an unnamed patron who was trespassed from the casino in July. The second incident involved an unnamed Riverside employee who was wrongly accused of smoking marijuana while on the job in August.
According to the complaint filed Feb. 9, security officers used excessive force to handcuff and detain the customer and the employee, who were both injured. In both matters, the security officers admitted to investigators for Riverside that the employee and customer were wrongly detained.
Arrest warrants for the four security officers were issued last year by the Laughlin Justice Court, according to the complaint. Each was charged with coercion with physical force, a felony, and false imprisonment, a gross misdemeanor, in the matters involving both the employee and customer.
It was not disclosed in either the complaint or settlement if the security officers were fired or why the incidents were not reported to the control board.
Analyst: March Madness wagering expected to blow past Super Bowl betting
The U.S. betting industry is expected to see a record $2.68 billion wagered on the NCAA Men’s Basketball Tournament during the next three weeks, according to a Southern California gaming advisory firm. The projected figure would equate to roughly 2 percent of all legal sports wagers nationwide in 2024.
Of the total, Eilers & Krejcik Gaming says slightly less than $200 million would be wagered in Nevada, the fifth-highest total of the 38 sports betting states. New York is expected to have the highest total — $391.2 million — followed by New Jersey with $311.7 million.
In a research note, Eilers & Krejcik analyst Chris Krafcik said the March Madness compressed schedule of 67 games in 18 days would lead to heavy influence by in-play wagering. He said the activity — bets taking place on action during the game — could reach between 35 percent to 40 percent of all wagers.
Another 5 percent of wagers will take place on single-game parlays, which involve multiple bets on one game, all on a single wagering ticket. Krafcik said college basketball lends itself to fewer single-game parlays than football.
Last month, Krafcik predicted wagering on Super Bowl LVIII would total $1.5 billion once all states have reported, which may not be known until April.
Krafcik said North Carolina, which recently launched statewide online sports betting and is home to the tournament’s No. 1 seed — the University of North Carolina — could account for 8 percent of bets placed on March Madness, the fourth-highest state with an estimated $220.9 million in wagers.
He said the state has seen a “glut of promotion money” spent by sports betting companies to attract new customers.
News, notes and quotes
Circa Sports opens a satellite location at Silverton …
Circa Sports completed a rebrand of the sportsbook space at the Silverton, giving the company and its growing sports betting business its fifth location in Nevada. Circa also operates sports betting in Colorado, Iowa and Illinois.
The renovation of the 1,600-square-foot former William Hill sportsbook gave Circa its first in southwest Las Vegas. Other satellite locations include The Pass Casino in Henderson, the Tuscany east of the Strip and at Steven’s D Las Vegas downtown. Circa operates a similar casino sports betting location at Legends Bay Casino in Sparks.
… and is bringing in Greg Maddux for MLB’s opening day
Hall of Fame pitcher Greg Maddux, a Las Vegas resident, will throw out a ceremonial first pitch inside the sportsbook at Circa Resort and Casino to signify the opening day of the Major League Baseball season on March 28. Maddux, who won 355 games in his career, will toss the pitch to Mike Palm, Circa’s vice president of operations, before the first of 15 games that day.
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Celebrity chef bringing Mexican-themed Tortazo to Caesars Palace …
Celebrity Chef Rick Bayless will bring his Tortazo Mexican restaurant brand to the Strip later this year at Caesars Palace through a deal with Caesars Entertainment. In a statement, Bayless, a Michelin-starred chef and cookbook author, said Tortazo is inspired by the cuisine in Mexico City.
Bayless will also open a Tortazo at Caesars-operated Harrah’s Joliet, which draws customers from the Chicagoland market.
… and Las Vegas Mexican favorite Lindo Michoacan is coming to Palace Station
The operators of the Mexican restaurant Lindo Michoacan will open their seventh Las Vegas location later the year at the Palace Station. The restaurant will replace the former Tacos & Tequila space at the off-Strip casino.
Lindo Michoacan owner Javier Barajas said the restaurant “celebrates the authentic flavors and warmth of Mexico."