Bally’s Not Rushing Tropicana Redevelopment, Sees Chicago Casino Opening Q3 2026

Posted on: May 1, 2024, 09:08h. 

Last updated on: May 2, 2024, 09:39h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

On its first-quarter earnings conference call Wednesday evening, Bally’s (NYSE: BALY) told analysts it’s not rushing the issue of redeveloping the site of the Tropicana Las Vegas, and that it expects its permanent Chicago casino will open in the third quarter of 2026 as planned.

Tropicana Las Vegas, Raimond Irimescu, Watch & Jewelry Guild expo
The Tropicana Las Vegas. Bally’s said it’s not rushing to a decision on the property. (Image: New York Times)

Bally’s CEO Robeson Reaves said Tropicana, which closed last month, remains on pace to be demolished in October, adding that the company is mulling alternatives for that site. That land is owned by Gaming and Leisure Properties (NASDAQ: GLPI) and nine of the acres are reserved for a Major League Baseball stadium.

We have absolutely no urgency whatsoever, as our option increases in value,” said Bally’s Treasurer Charles Diao on the call.

Diao noted the longer the gaming company waits to finalize a decision on the Tropicana, the more its option value increases and that its current capital requirements on the site are low.

There is “significant flexibility for an array of strategic options for the site, including new integrated resort and entertainment district at the southern end of the Las Vegas Strip” and the Tropicana site could represent “expansion of the Bally’s brand at one of the busiest intersections in the country,” according to the operator’s investor deck.

Bally’s Answers Some Chicago Questions

Facing an $800 million funding gap and increasing criticism of its Chicago plans, Bally’s reiterated that it expects its permanent casino in the city will open in September 2026, and that it will have access to the Tribune site — the venue’s home — in July.

Bally’s temporary casino at Medinah Temple in the River North section of the city has posted six consecutive months of gross gaming revenue (GGR) gains, but some critics assert that’s because of heavy promotional spending.

That could be a sign that the operator is focusing more on bolstering its customer database and topline growth rather than ensuring profitability. In the investor presentation, Bally’s said more than 80K customers joined its loyalty program in Chicago in the first quarter compared with 60K last year. The company added that the temporary casino is the second-most visited gaming venue in Illinois and the second-largest as measured by table game revenue.

“I don’t know that there’s a science behind how much ramp is enough,” said CFO Marcus Glover on the conference call. “Right now, profitability is pretty light, but that’s intentional.”

Not Much Detail on Takeover Talk

On the call, there was no mention of conjecture regarding Bally’s potentially being a takeover target for GLPI. Likewise, executives didn’t expand on Standard General’s $15 per share acquisition offer floated in March, except to say that a special committee of independent directors continues to evaluate that bid.

Reeves also discussed the operator’s plans for New York, indicating that the state’s slow-moving process of awarding three downstate casino permits could be to Bally’s benefit.

“In New York, the licensing and approval process is extending further. We now anticipate a decision from the state no earlier than late 2025. While this delay will postpone the economic benefits from the planned integrated resort later into the future, it also reduces our immediate and medium-term financing needs,” concluded the chief executive officer.