It is beginning to look a lot like musical chairs on The Boardwalk in Atlantic City.
Last year, billionaire investor Carl Icahn, sold the former Trump Taj Mahal to Hard Rock International and a group of investors. On June 28, the property will reopen as Hard Rock Hotel and Casino Atlantic City with a brand-new look and feel.
Earlier this year, Glenn Straub, a Florida real estate developer sold the former Revel Casino Hotel to AC Ocean Walk. After $175 million worth of renovations, it is scheduled to reopen this summer as Ocean Resort Casino.
Then this week, Tropicana Casino & Resort Atlantic City, as part of a package deal, was sold to Gaming and Leisure Properties, Inc. (GLPI) and Eldorado Resorts Inc. Icahn was once again the one selling.
The casino is thriving and will maintain current operations heading into what is sure to be a record-setting summer.
The details of the Tropicana properties sale
Icahn’s firm Icahn Enterprises agreed to sell Tropicana Entertainment Inc. and it’s seven properties to GLPI for $1.21 billion. Eldorado Resorts Inc. will lease the assets from GLPI for $640 million and manage the operations of the properties.
GLPI primarily invests in casinos as a real estate investment rather than for its gaming potential. It currently has 38 casino properties in its gaming portfolio. It only operates two of the properties and leases the remaining to various companies including:
- Penn National Gaming, Inc.
- Casino Queen
- Pinnacle Entertainment
Eldorado will soon be on that list. Eldorado is a Nevada-based gaming company and operates 20 properties in 10 states. The sale will expand Eldorado’s reach into two new states: New Jersey and Indiana.
The $1.85 billion deal includes seven casinos in six different states, including:
- Tropicana Casino and Resort, Atlantic City (New Jersey)
- Tropicana Laughlin Hotel and Casino (Nevada)
- MontBleu Casino Resort & Spa in South Lake Tahoe (Nevada)
- Tropicana Evansville (Indiana)
- Belle of Baton Rouge Casino & Hotel (Louisiana)
- Trop Casino Greenville (Mississippi)
- Lumière Place (Missouri)
There is an eighth Tropicana property that is not part of the deal. Disposal of Tropicana Aruba Resort & Casino separately is a condition of the sale closing.
“The acquisition of seven Tropicana Entertainment properties will allow Eldorado to enter two new gaming jurisdictions and deliver additional financial and geographic diversity to our operating base,” said Eldorado Resorts Chairman and CEO Gary Carano, as reported in the Press of Atlantic City.
The deal will position Eldorado and GLPI to enter the New Jersey live and online gaming market. Both companies have expanded their geographical reach and are looking forward to becoming a player in the NJ online gaming industry.
From bankruptcy to profitability
In 2008, Icahn Enterprises acquired a majority interest in Tropicana Entertainment Inc. while it was in the midst of bankruptcy.
Icahn’s firm specializes in creating success stories. It buys undervalued properties and enhances operations until they can or are in a position to realize a profit for his firm.
Two years after purchasing its interest in Tropicana, Icahn backed a $200 million plan that allowed Tropicana to emerge from bankruptcy in 2010. They haven’t looked back since.
“I am incredibly proud of what the entire Tropicana team has been able to accomplish over the past eight years, taking Tropicana from bankruptcy to one of the industry’s success stories,” Tropicana President and CEO Tony Rodio said in a separate statement to the Press.
“Hopefully, they keep Tropicana (operating) as the booming property it has become,” City Council President Marty Small Sr. said. Small goes on to complement Rodio and his commitment to turning Tropicana into a profitable property.
“He’s a fine executive. He’s always given back to the community and has really turned Tropicana around,” Small said.
High expectations for a lucrative summer in Atlantic City
Hard Rock Atlantic City and Ocean Resort Casino have been busy getting ready for their summer openings.
In addition to the two grand openings, Resorts Atlantic City will be celebrating 40 years in the city with a summer-long celebration that is sure to be a not-to-be-missed party.
The various celebrations, an impressive entertainment lineup, and what amounts to a brand-new face has generated a level of optimism the city is embracing. Expect visitors and locals alike to be spending plenty of summer nights on The Boardwalk.
As a side note, Icahn still owns the still-shuttered Trump Plaza Hotel and Casino. The property closed in 2014 and has been sitting vacant ever since. After selling two Atlantic City properties in the last year and with the revitalization of the city underway, it won’t be surprising at all if another casino changes hands sometime in the future.