Bally’s Atlantic City Is Being Sold To VICI Properties
According to an article posted on PressofAtlanticCity.com on 4/24/20, Caesars Entertainment and VICI Properties (a subsidiary of Twin Rivers Worldwide Holdings) have reached an agreement. Caesars will sell Bally’s Atlantic City to VICI Properties.
VICI will become the new owner of Bally’s Atlantic City, but Caesars will keep Bally’s Wild Wild West and the sportsbook
The two parties jointly announced that VICI will pay Caesars $25 million for the sale. However, VICI will receive $6 million back for the return of Bally’s Wild Wild West and The Book (Bally’s sportsbook). Caesars wants to hold onto those two highly profitable Bally’s offerings while unloading the rest of the underperforming property.
This transaction is contingent on regulatory agencies’ approval and other conditions for closing. Obviously, the deal can only go through if VICI Properties applies for and obtains a license to operate in New Jersey.
Also, it is unlikely that any significant steps can take place until after the Atlantic City casinos receive official permission that they can safely reopen. Caesars anticipates a late 2020 closing date.
So for now, Bally’s Atlantic City will remain part of the Caesars Rewards network. But if and when the deal becomes finalized, that will no longer be the case.
How Caesars views the sale of Bally’s Atlantic City
Besides Bally’s, Caesars Entertainment currently owns two other Atlantic City casino properties–Caesars and Harrah’s. However, once the expected merger with Eldorado Resorts becomes finalized, Caesars would also own Tropicana Atlantic City.
Caesars is concerned that state regulators would regard one company operating four of the city’s nine casinos as “undue economic concentration.” So from that perspective, selling the least profitable casino, Bally’s, makes sense.
According to Dan Heneghan, a gaming industry consultant and retired communications director for the Casino Control Commission, selling Bally’s would “significantly improve the odds of New Jersey regulators approving the Eldorado-Caesars merger.”
Heneghan also pointed out that bringing a new operator into the AC market would increase regional competition.
Tony Rodio, CEO of Caesars Entertainment issued the following comment on the sale:
“We look forward to the reopening of Bally’s Atlantic City as soon as appropriate once the public health emergency related to COVID-19 has passed. We appreciate Twin River’s commitment to this property, which has a great future ahead under its stewardship.”
Can VICI Properties succeed in Atlantic City?
VICI Properties is a real estate investment trust that currently owns more than 20 casino properties in the US and leases them to gaming operators. The company was established in 2017 as part of the Caesars Entertainment’s bankruptcy reorganization. However, it has no prior experience in Atlantic City.
When the Atlantic City casinos finally receive permission to reopen, Bally’s will need a lot of work to remain competitive. Other than planning to offer a sportsbook and online gambling, what other improvements VICI Properties intends to make remain to be seen. Another big question mark is how players will respond to the new Bally’s or even if it will be called Bally’s. Ocean Casino Resort struggled for months before it finally found its footing, and that was when Atlantic City’s economy was robust.
At this time, what I believe Atlantic City casino players want more than anything else is to return to their favorite existing casino(s), not try a new one.
Will Harrah’s Atlantic City be next?
Bally’s Atlantic City may not be the only Atlantic City property that Caesars Entertainment will unload. VICI is eager to go after Harrah’s next. This is what John Payne, President and COO of VICI Properties, had to say on the subject.
“The sale of Bally’s Atlantic City demonstrates our ongoing commitment to work collaboratively with our tenants to optimize our individual businesses, even during these unprecedented times. This transaction allows us to maintain the existing financial terms of our master lease with Caesars and helps balance our geographic diversification as we work to complete the acquisition of Harrah’s Resort Atlantic City.”
This writer is very concerned
Presumably, once the transition of property ownership to VICI is finalized, the affected casino(s) will no longer be part of the Caesars Rewards network.
I am not happy at all about the pending new developments and what they will mean for Atlantic City casino players. Compounding all of the upheaval we’re already experiencing in these uncertain times, these additional changes will create more chaos and confusion. This is very unsettling news to thousands of loyal players who can’t wait to return to these AC casinos that have been their home away from home for years while reaping the rewards from the biggest and best casino rewards program in the country.
I plan to express my concerns to both Caesars Entertainment and the Casino Control Commission and suggest that if you share my feelings, you do likewise.
This is a developing story. NJ Online Casino will continue to update you on all of the latest news as it happens.