PSST! Don’t tell Soo Kim but sugar daddy Gaming & Leisure Properties is making plans for a post-Bally’s Corp. era. Nor are they being secretive about it, spilling the beans to the invaluable Barry Jonas of Truist Securities. It had nothing to report on troubled Bally’s Chicago “though we think the development remains behind schedule. We also believe some of GLPI’s stock underperformance relates to BALY credit concerns,” which are very real. It’s what happens when you budget money you don’t have (and can’t borrow), expecting GLPI CEO Peter Carlino to pick up all the tabs.
Continued Jonas, “we continue to believe alternative operator demand would exist for Chicago in a bearish scenario where BALY would have to exit.” Things must be getting bad if exit strategies from Bally’s are being contemplated. Gosh knows, the tone on GLPI earnings calls has perceptibly cooled where Kim’s feckless company is concerned. As for Bally’s garish/delusional Las Vegas Strip project, “We see limited risks for GLPI at the Tropicana site noting the potential for BALY to sell its development rights to another party.” Yup, those exit strategies keep piling up … and we’d love anything that spares us the architectural abomination pictured below.
The whole Trop-site redevelopment is looking like quite the civic clusterfuck, even though the Sacramento A’s are going through with the “construction kabuki” of holding a meaningless groundbreaking. (They said they’d do it by June, so they pretty much have to.) Never mind that the project remains largely unfunded. The Powers That Be in Las Vegas insist that Everything Is Fine, no matter that team owner John Fisher has no appetite (or money) for building his vanity park. Two ‘unfunded mandates’ on one city block? What are the odds?
For its part, Bally’s looks to be high and dry in Australia. Its bargain-basement ($195 million) trophy, Star Entertainment, is looking at a $260 million fine for its flagrant-beyond-belief money laundering under previous ownership. If Bally’s didn’t know (and it should have) that this was coming, it’s going to find out in a hurry. The company doesn’t have nearly enough cash on hand to cover the penalty and Star execs say they can’t even pay $57 million. Heck, they say they can’t even go forward as a going concern. If you can’t pay the fine, don’t do the crime.
As for Bally’s, it may not get a chance to debase Star’s glossy casinos into grind joints but see its self-proclaimed triumph turn to instant ashes. Soo Kim must have been smart at something to become a billionaire, but his “casino empire” is firmly rooted in thin air.
Other Jonas disclosures were that Station Casinos‘ tribal project in California will appear awfully familiar to wandering Las Vegans. According to financier Vici Properties, “the property will look and feel similar to [Station’s] Durango property.” Why mess with runaway success? The North Fork Rancheria of Mono Indians will be ultimately on the hook for $710 million (of which Vici is fronting $510 million) but this looks like a pretty safe bet. It would certainly come as a shock to certain racist legislators in North Dakota to learn that Wall Street REITs are lining up to underwrite tribal casinos. Nor is this a one-off for Station and Vici: Jonas hints that it may finance other Station projects, of which there are quite a few on the drawing board, especially in the Sin City area.
Vici also waved away “headline weakness” at Fontainebleau. Being $350 million into a struggling megaresort will do that. Management rationalizes that “Conference bookings are naturally softer in a property’s first 1-2 years … as customers check out the site before booking.” F-blue ownership is banking on good word of mouth and the reputation of its dining offerings turning the tide. The presence of Koch Industries as a fiscal bulwark also gives Vici confidence in its (admittedly smallish) investment. This isn’t the first time we’ve read that F-blue is counting on convention business to be its ace in the hole.
Lawlessness and disorder. With contempt for the law running rampant in the United States, we can understand why Osceola County Sheriff Marcus Lopez would covet a piece of the action. He’s been arrested and charged with having a cut of an unlawful gambling ring in Florida. You’d think with all the legal gambling operations in the Sunshine State that there wouldn’t be an appetite for black-market play. But you’d think very wrongly. It’s a rampant problem down yonder. Regulation of this sorry state of affairs can’t come soon enough. Lopez has been rightly suspended from his duties by Gov. Ron DeSantis (R), as news of his arrest goes viral.
Sands run out. It’s over. Stick a fork in it. That’s what Nassau County Executive Bruce Blakeman (R) says about Sands Nassau, the casino megaresort contemplated for Long Island. As June 27 draws nigh, Blakeman has given up hope that Las Vegas Sands will find an iGaming-savvy casino operators to relieve it for this New York State albatross. If Blakeman is right, Sands has saddled itself with a $7.9 billion albatross. That’s how much it would cost to redevelop the Nassau Coliseum.
Even were a white knight were to found, it would get a hostile reception. Nassau residents have been hopping mad about the notion of a casino-hotel in their burg. (The term “environmental racism” has been lobbed at the project.) Nor have they been mollified by Sands’ cancellation of its casino application. Incoming Sands CEO Clark Dumont will find himself having to make the best of a very bad situation. In for a penny, in for $7.9 billion.