Having received final approval from the Nevada Gaming Commission last week, Penn National Gaming yesterday completed its planned purchase of Tropicana Las Vegas for $360 million.
"The addition of Tropicana Las Vegas to our national portfolio of gaming assets is an exciting and important milestone for Penn National as it fulfills our longstanding strategic objective to acquire the right resort at the right price on the Las Vegas Strip. Tropicana Las Vegas will allow us to leverage our database of nearly 3 million active regional gaming customers while further diversifying our operations with another wholly-owned asset," Penn National CEO Timothy Wilmott said in a statement. "Our regional gaming customers have long asked us to offer them an attractive destination on the Las Vegas Strip. After our disciplined search, we believe the iconic Tropicana Las Vegas will successfully address customer demand for a Strip property while enhancing our already strong competitive position in the local markets where we operate. Furthermore, the Tropicana Las Vegas is ideally suited to benefit from significant investment at adjacent gaming properties which is expected to generate additional traffic in the area."
Although Tropicana already has undergone over $200 million of upgrades over the past four years, including renovations of all of its nearly 1,500 guest rooms, Penn National has a two-phase plan to further enhance the property over the next three to five years. Scheduled to occur over the next six to nine months, phase one will see a $20 million investment in upgraded technology infrastructure to allow for the integration of Penn National's nationwide player loyalty program, Marquee Rewards, at Tropicana Las Vegas, with the goal of launching the program in the second quarter of 2016.
Subsequently, during phase two, Penn National will add new retail space, food and beverage outlets, casino floor improvements and potentially additional hotel rooms.
"We believe the addition of Tropicana Las Vegas to our regional gaming property portfolio will enable us to drive significant long-term shareholder value," Wilmott contineud. "We look forward to … welcoming our guests from across the country to the Las Vegas Strip."