Penn National Gaming is one of the country’s biggest and most successful casino operators. The company has made headlines recently for some of its major deals and acquisitions. This week, officials within Penn Gaming announced they’re still looking to sell LV Tropicana.
The sale of this casino-resort has been discussed for years. It’s a popular venue off the Strip and is likely to fetch a high price. Today, we’re going to look at some of the Tropicana’s recent deals and talk about when the company is looking to sell this property in Las Vegas.
Penn Gaming Purchases 36% Stake in Barstool Sports
There’s a good chance you’ve seen Penn National Gaming’s name in the headlines recently. Recently, this company paid $136 million for a 36% stake in sports blog Barstool Sports. With this investment, Barstool is now valued at an incredible $450 million.
The decision to work with this company makes sense for Penn National Gaming. Barstool Sports has one of the largest social media followings in the country. Most feel that the deal will help to bring significantly more people to Penn Gaming’s casinos.
Ron Baron, a billionaire investor in New York, believes this deal will prove extremely valuable for the casino company.
“Not only are they going to make a lot of money on this investment for this $150 million and buy the rest of it out from the founder, but also it’s going to increase the traffic in their casinos,” Baron said. “It’s going to be worth a ton.”
It’s clear that Penn National Gaming is looking to expand. Interestingly, the company wants to start generating more revenue from property sales. As a result, officials are now looking to sell the LV Tropicana. Based on several reports, this sale will take place sometime in 2020.
The Push to Sell the LV Tropicana Continues
The Tropicana Hotel-Casino in Las Vegas is one of the city’s most popular venues not located off the Strip. It opened to the public all the way back in 1962. Since that time, it’s changed ownership hands several times.
Several major renovations have also been made to this property. In 1986, the owners built a new 21-story Island Tower here. In 2007, a massive $2 billion expansion project was planned. Due to the financial crisis, these plans were eventually scrapped.
In 2015, Penn National Gaming purchased this property for $360 million. The company has worked hard to make this a more popular with locals and tourists. Unfortunately, it appears the revenue generated from this hotel-casino is not as high as initially projected.
As a result, Penn National Gaming is looking to sell LV Tropicana. Jay Snowden, CEO of Penn Gaming, told the media that several offers for this venue have already been presented.
“On the Tropicana side, there’s been so much unsolicited interest that it’s just very active,” he said. “We got another call two days ago with interest in potentially acquiring some or all of the land holdings there. It’s very active.”
Snowden claims this sale is a real priority for the company. Competition in the US casino industry continues to grow. Let’s take a look at how Penn Gaming performed last year.
Penn National Gaming’s 2019 Revenue Figures Are Released
The US casino industry is in an interesting place. More states have recently begun to expand their laws to allow more casino gambling options. As a result, many companies are beginning to earn significantly more revenue.
On the other hand, competition is growing in this industry, too. Some of the biggest companies are controlling much of the market. Penn Gaming’s investment into Barstool Sports was expected to help with this issue.
Unfortunately, the company recently reported revenue losses in 2019’s fourth quarter. The company posted revenue of $1.34 billion last quarter. This is significantly less than analysts initially projected.
This isn’t something to be concerned about, though. Most feel that this company’s share prices will continue to rise throughout 2020. Once the company is able to sell LV Tropicana, these shares will increase significantly.
It’s an exciting time for Penn Gaming and the US casino industry as a whole. Stay tuned for more casino news over the next few months!