As the sun set on Wall Street earlier this evening, the esteemed executives of Bally’s (NYSE: BALY) convened for their first-quarter earnings conference call. Despite mounting anticipation among the analyst community, Bally’s adopted a calm and composed stance, indicating that they are in no rush to redevelop the treasured site of Tropicana Las Vegas. In the same breath, they released a sigh of relief to stakeholders, maintaining that their permanent Chicago casino remains on track to swing open its doors in the third quarter of 2026.
Once a jewel in the crown of the strip, Tropicana Las Vegas came to a close last month. However, the property remains on course to face the wrecking ball in October. Beyond this point, Bally’s is contemplating a range of alternatives for the roughly nine acres owned by Gaming and Leisure Properties (NASDAQ: GLPI), including space reserved for a Major League Baseball stadium.
According to Treasurer Charles Diao, there is “absolutely no urgency whatsoever” as their option value increases with time. With a decreasing need of capital investment on the site, the gaming conglomerate has the upper hand in deciding the future of Tropicana. They are considering a host of strategic options including a new integrated resort or an entertainment district at the southern end of the Las Vegas Strip, that would simultaneously expand the Bally’s brand and touch one of the busiest intersections across the nation.
Coming to its Chicago project, Bally’s faces an $800 million funding gap along with escalating criticism. Assuring stakeholders, Bally’s projected that its permanent city-based casino will open in September 2026. They also ensured that the famed Tribune site, the casino’s future abode, will be theirs by July, demonstrating a steady trudge ahead.
Bally’s current stint at the Medinah Temple in River North, Chicago has garnered six months of consecutive gross gaming revenue gains, despite accusations of heavy promotional spending. The operator believes the gains are signs of healthy customer database fortification and top-line growth, even if this means lighter profitability for now.
Their CFO, Marcus Glover, maintains “profitability is pretty light, but that’s intentional.” Adding a nugget from the investor presentation, over 80,000 customers have been added to Bally’s loyalty program in Chicago during the first quarter of 2021. Bally’s easily surpassing last year’s membership addition of 60,000.
In other news, there was no mention of Bally’s potentially being a takeover target for GLPI on the call. Standard General’s acquisition offer of $15 per share, which was floated in March, was also left untouched except for a terse announcement that it is being evaluated by a dedicated committee of independent directors.
Bally’s also shared insights about their plans in New York. The slow-rolling process of the state in awarding three downstate casino permits may serve in favor of the operator. As CEO Reeve indicated, an anticipated state decision is expected “no earlier than late 2025”. This delay, though postponing the economic benefits from the planned integrated resort, significantly eases the immediate and medium-term financing needs for the company. A subtle sense of optimism resonated across the boardroom as Bally’s trots on to its next milestones.
