Bally’s Corp. will take its first step toward cementing the company’s presence in Nevada.
The state’s Gaming Control Board Wednesday will consider the licensing request for Rhode Island-based Bally’s acquisition of the operations of MontBleu Resort in Lake Tahoe.
Most analysts, however, believe Bally’s has a loftier target – the Las Vegas Strip.
Bally’s Chairman Soo Kim
Bally’s Chairman Soo Kim spent $20 million last fall to acquire the trademark and rights to the Bally’s name from Caesars Entertainment. At the time, the company was known as Twin River Worldwide Holdings. Caesars retained a perpetual licensing right to the name for Bally’s Las Vegas.
In a separate deal with Caesars, then-Twin Rivers bought Bally’s Atlantic City for $25 million. The Bally’s name is expected to be used throughout the portfolio by repositioning existing resorts under the brand.
Already, recently acquired casinos in Kansas City, Missouri and Vicksburg, Mississippi are being rebranded as Bally’s. MontBleu, which was once known as Caesars Lake Tahoe, is expected to receive the same treatment.
Bally’s leadership, including Kim and CEO George Papanier, could be asked about the company’s additional expansion plans by Nevada regulators.
Kim is a co-founder of the hedge fund Standard General that owns 39% of Bally’s. He told the New York Post last fall that rival casino companies saddled with debt will need to shed properties.
“We are one of the few that have scale and a good balance sheet,” Kim said.
Bally’s has been on an acquisition streak for much of the last 18 months, now operating 11 casinos in seven states. Through pending deals, the company expects to have 15 casinos in 11 states by next year.
It is also creating an omnichannel interactive betting division through its $125 million acquisition of sports betting platform Bet.Works and its partnership with media giant Sinclair Broadcast Group.
The next road possibly leads to the Las Vegas Strip.
“We could see this potentially being a first step towards a Las Vegas acquisition,” Truist Securities gaming analyst Barry Jonas said in October.
However, Jonas said purchasing Bally’s Las Vegas was challenging because the Strip resort is connected to the neighboring Paris Las Vegas, both physically and operationally.
Caesars CEO Tom Reeg said last week that a planned sale of one of the company’s eight Strip resorts wouldn’t happen until 2022 at the earliest.
For now, Bally’s focus in Nevada will be on the operations of the 438-room MontBleu.
The purchase was originally announced last April when then-Twin River acquired the property along with Eldorado Shreveport from the former Eldorado Resorts for a combined $155 million.
The transaction helped Eldorado clear federal anti-trust issues overshadowing the company’s $17.3 billion purchase of Caesars Entertainment. MontBleu is one of four casino resorts on Lake Tahoe’s Southshore near the California-Nevada border. Caesars owns both Harrah’s Lake Tahoe and Harvey’s and Paragon Gaming operates Hard Rock Lake Tahoe.
MontBleu is owned by the Edgewood Companies, which controls the land and buildings. Bally’s said last April it entered into an amended agreement with the landlord, that included the extension of the lease term to the end of 2035.
The $80 million Tahoe South Event Center is being built adjacent to MontBleu on land donated by Edgewood.
The partnership with Sinclair included rebranding 19 regional sports networks under the Bally’s name ahead of the company launch of its sports betting brand.
Jonas expects Bally’s sports betting app would initially be unveiled in four states – Colorado, Iowa, Indiana, and Pennsylvania. MontBleu gives the company access to Nevada, but a Strip casino would increase the company’s presence.
The Control Board’s recommendation will be considered by the Nevada Gaming Commission on March 18.
The Eldorado Shreveport sale closed in December and Bally’s said the cost was $140 million. The hotel-casino is expected to be rebranded as Bally’s.
Shares of Bally’s, traded on the New York Stock Exchange, closed last week at $59.52.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
