Eldorado Resorts Receives AC Tropicana As Part Of Seven-Casino Deal

Eldorado, based in Reno, will get AC Trop as part of an agreement to take control of seven Atlantic City casinos for $ 640 million.

The New Jersey Casino Board has given Eldorado Resorts interim approval to operate the Atlantic City casino at a meeting on Wednesday. The commission has nine months to decide whether to grant a permanent license.

New contest

Eldorado takes control of the Tropicana during a rebounding period in Atlantic City, according to experts. The total business figure increased by 13% in July and the report released by the DGE this week shows a 24% increase in total revenue in August, largely due to the arrival of legal sports betting .

"We will have to fight for our position in this market. We expect a fight for market share and we are ready to get involved, "said Thomas Reeg, President of Eldorado Resorts. Associated Press. "We are buying an asset that we hope will be 50, 100 years from now."

In August, game sales figures released by New Jersey's Division of Gaming Enforcement (DGE) show that Tropicana Atlantic City's revenue in 2018 was down 3.5% from the same period last year.

However, this is not unusual for Atlantic City. Bally's, Borgata, Caesars, Harrah's and Resorts have all seen their revenue drop over the same period, which James Plousis, President of the Casino Control Commission, attributes to the competition of the new Hard Rock and Ocean Resort casinos.

The 3.5% drop in Tropicana sales is also the lowest revenue loss among Atlantic City casinos, and the total revenue of $ 260,323,690 is the second highest, according to DGE .

Change hands

Carl Icahn sold the Tropicana Entertainment real estate assets to Penn National REIT spin off (GLPI) for $ 1.2 billion in April. As part of this agreement, Eldorado will take over the operating assets and lease of seven Tropicana properties in the United States and will pay Icahn Enterprises an additional $ 640 million.

The seven properties of the Trop brand – besides the Too AC – are located in Nevada, Missouri, Mississippi, Louisiana and Indiana.

Icahn oversaw Tropicana Entertainment for a decade.

"By reinvesting every penny of profits in the company," since buying it back in 2008 until the sale earlier this year, it has "turned Tropicana into a big casino company," Icahn said in April.

GLPI will own the property and will enter into a 15-year lease with Eldorado, which will take over the operations. The agreement also allows Eldorado to renew the lease for a maximum of 20 years.