Tropicana Las Vegas Sold Amidst Coronavirus Shutdown

The owner of Tropicana Las Vegas, Penn National Gaming, has sold the casino to its real estate investment trust (REIT), Gaming & Leisure Properties, Inc.

Penn National Gaming will continue to operate the resort.

Penn National will get $337.5 million in “rent credits” (the equivalent of five months rent) from Gaming & Leisure, its principal landlord. See the news release.

Tropicana hotel

The Trop has a history of drama, and this qualifies as that.

For comparison purposes, MGM Resorts pays $292 million a year in rent to Blackstone Real Estate for Mandalay Bay and MGM Grand.

A sale of Tropicana has long been rumored. We know this because it was our rumor. No one could’ve predicted this turn of events, however.

The sale of Tropicana is largely due to “liquidity pressure” resulting from the coronavirus shutdown. Translation: Casino companies are taking it in the butt right now.

Always happy when we can help cut through the jargon.

What Penn isn’t saying is this move was probably driven by the desire to avoid a future bankruptcy. The company has additional assets it could shed, to that move doesn’t appear to be in the immediate future.

More bad news is on the horizon, as Penn (which operates 41 casinos in 19 states, including M Resort in Las Vegas) has said it will furlough about 26,000 employees starting April 1, 2020. The company will pay employees through March 31.

Here’s the letter sent to Penn National customers on March 27, 2020.

Penn National Gaming

Free vision test. You’re welcome.

The upshot of the unceremonious sale of Tropicana is guests won’t see any changes at the resort when they visit again. And everyone’s hoping that’s relatively soon.

Update (4/1/20): Before the ink could even dry on its REIT sale, Tropicana is rumored to have been sold for $307.5 million, or $52.5 million less than Penn National Gaming paid five years ago.

8 thoughts on “Tropicana Las Vegas Sold Amidst Coronavirus Shutdown

  1. Vegas Insight

    I know I’m crazy, but I will keep saying it. If you operate the Trop like the Orleans, or better yet a downtown casino, you’ll do very well at the intersection of LV Blvd. and Tropicana Avenue.

    There’s got to be a reason why nobody is willing to go that route, but I don’t get it. I made a rare cameo inside the Trop in the summer of 2018. Plenty of people and plenty of action everywhere, and yet the Trop might as well have been shuttered that day. How could changing up the marketing plan make things worse? Take what the D is doing, more or less, and offer it on the strip. That will fail?

    Reply
  2. Bruce

    I’ve always wanted to like the Trop. Every time we’re in town I look forward to it and have to go there. But something just feels ‘off’ there. I really like the brightness and color combinations, but it can’t seem to hold me in. After an hour or so I’m down the road. Not sure why that is – anybody else get a similar vibe?

    Reply
  3. shannon

    I enjoyed the old trop with the free spins on the way in. We won follies berge tix once. Also the show in the sky was cool. And the 20 for 10 promo and the tic tac toe chicken. That was the trop. Now total different vibe.

    Reply
  4. I. Diaz

    As an adult, Tropicana was my first Vegas hotel. And they say you never forget your first. I loved its old-school, pre-renovation charm, but I also love its beachy white-washed overhaul that somehow preserved throwbacks like the stained glass above the casino floor.

    But what does Tropicana offer that differentiates itself from its neighbors?
    — A sweet pool? Yes, but Mandalay Bay does it better.
    — A sense of luxury? MGM and Mandalay have more options.
    — Discount rooms? Not cheaper than Luxor and Excal’s.
    — Great gambling odds and/or rewards program? Hard to top MLife.
    — A nationwide network of sister/feeder casinos? Actually, Trop has this.
    — Food and drink specials? Not cheaper than Hooters/OYO.
    — Name-brand food and retail opportunities? Not nearly enough of either.
    — An impressive nightlife (or daylife) scene? *Crickets* since Nikki Beach left.
    — History? Perhaps, but Caesars Palace and all of downtown Vegas do it better.
    — Attracting conventions (and conventioneers’ expense accounts)? Nope.
    — Access to the Strip? NYNY and MGM need fewer pedestrian walkways.
    — Good entertainment? Trop has tried, but it’s been years since anything worked.
    — Good people watching? Not without perfecting most of the above components.

    I bet Tropicana wishes MGM had, in its heyday, built one more casino just south of the Trop to extend the Strip since Mandalay Bay’s presence doesn’t add much foot traffic (and none on the east side of the Strip). Instead, that MGM-owned land south of Tropicana became the ill-fated grounds for music festivals.

    I know it’s not MGM’s responsibility to prop up the Trop. But Hooters/OYO doesn’t instill much panache either, and it’s sad to see that corner languish. There were rumors that a retail complex would be added in front of Tropicana, but if it became anything like Bally’s bizarre Bazaar, I’m glad that didn’t happen.

    So what’s left to keep Tropicana from becoming the Bubba Gump Shrimp of the Strip?
    — Stable ownership that, behind the scenes, can lean into the convention business. Those same stable owners also should get Hilton to work its Conrad/Curio Collection magic on Tropicana’s branding and room options.
    — Find some permanent, popular entertainment options that aren’t retreads from other casinos (easier said than done). Bring back the classic Follies showgirls, but modernize some aspects like NYC’s Rockettes have done.
    — Rejoin pop culture (encourage non-douchey celebrities and influencers, film Hangover-esque movies, attract famous residencies, create a Tesla showroom and driving school, host award shows, etc.)
    — The best gambling odds on the Strip: Every table game. Every slot-machine denomination. All the time. Cater to gamblers.
    — And perhaps play up Tropicana’s history better than Flamingo does. (speakeasies, an actually functional Mob Museum annex, nightlife that ties into either the Swinging ’60s or pre-revolution Cuba, a how-the-Strip-grew exhibit, etc.)

    Reply
  5. JeffinOKC

    I read this to be a simple real estate play. It has nothing to do with casino operations or ownership. PENN has traded the Trop real estate for “rent credit”. I figure that means they don’t have to pay rent on any of their casino properties owned by their REIT for however long it takes to use up $375 million. That makes it a lot easier to ride out the virus downturn.

    Reply
  6. Frances McMahan

    frances McMahan
    may 14, 2020 at 12:13 pm

    I have always loved the trop, I always go there when I come yo town, even tho a lot of the machines that
    I like are no longer there, so what the other casinos are the same my favorites are gone there to. the
    casinos need to go back and look at their gamblers to see what they are playing. I don’t get to go as
    much anymore. I will always love las vegas and will always visit all of my favorites.

    Reply

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