1/8/15: LAUGHLIN, Nev. (AP) - The company that owns the Dotty’s tavern chain is buying the River Palms casino in Laughlin from Tropicana Entertainment Inc. for $6.75 million in cash.
Question: It seems the price of the land and improvements that was sold for $6.75 million was low for the real estate market in 2014. My question is can you shed any light on why such a low price and why other large casino operators like Station Casinos, Boyd Gaming, MGM, Golden Entertainment, did not pick the property up at that price. The location is prime and the market has come back nicely from the last recession.
Sale price is usually reflective of cash flow and if the River Palms changed hands for less than $7 million, its cash flow must have been low.
As far as the companies you mention, all we can offer is speculation.
For instance, Boyd Gaming has never shown any interest in the Laughlin market, nor has Station Casinos. The latter, except for a disastrous foray into Missouri, has kept its owned-and-operated properties strictly in the Las Vegas Valley. Even though it owns two parcels in Reno, it has long hesitated to develop them. Boyd also hasn't shown interest in Nevada markets that aren't named “Las Vegas.”
Forgive us for saying this (or don't), but MGM Resorts International wouldn't stoop so low as to add the likes of the River Palms to its portfolio. Locals casinos aren't in its DNA and it has been busy offloading small fry like the Railroad Pass and Gold Strike casinos.
As for Golden Entertainment, although it has a hammerlock on the Pahrump market and is growing its presence in Las Vegas, it must have decided that Laughlin doesn't fit into its business model — or it just didn’t get a chance to bid on the property. Of the also-rans you name, it’s the most logical alternative besides Dotty’s, especially since both have their roots in slot routes.
At any rate, given the sale price, Tropicana Entertainment must have wanted to unload the River Palms rather badly. It was a former Columbia Sussex property and those casinos tended to suffer from a lack of capital-expenditure maintenance. Dotty’s has put a lot of work into refreshing the asset. Draw your own conclusions as to what sort of condition the River Palms was in when Dotty’s took it over.
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Bradley Waddell
Apr-02-2018
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