The Belle of Baton Rouge will be sold as part of a $1.85 billion acquisition of Tropicana Entertainment Inc. by Eldorado Resorts Inc., the Nevada-based owner of casinos in Lake Charles and Shreveport.
As part of the deal, Gaming and Leisure Properties, the owner of Hollywood Casino in Baton Rouge, will acquire the real estate assets of Tropicana, including the Belle of Baton Rouge facilities, for $1.21 billion total. The firm will lease the properties to Eldorado for about $110 million a year, according to news releases announcing the deal.
The board of directors for Tropicana, Eldorado and Gaming and Leisure Properties have approved the sale, but it still needs approval from gaming regulators in various states. The transaction is scheduled to close by the end of the year.
If the sale is approved, Gaming and Leisure Properties will own the real estate assets of all three Baton Rouge casinos. Gaming and Leisure Properties already both owns and operates Hollywood Casino Baton Rouge. In 2016, it struck a deal with Pinnacle Entertainment to take over its properties, including L'Auberge Baton Rouge, with Pinnacle continuing to operate L'Auberge in a lease arrangement.
In addition to the Belle of Baton Rouge, Eldorado Resorts is acquiring the operating assets of six other casinos to add to its existing portfolio of 20 properties.
The Belle is the oldest casino in the market and brings in the least amount of revenue. But Tropicana has been willing to spend money on the property. The company spent $7 million in 2011 to renovate the riverboat casino, which sits north of the Mississippi River bridge downtown, in an effort to ward off competition from L’Auberge Baton Rouge.
Casino executives from Tropicana also have vowed to spend millions moving the Belle’s riverboat onto land as part of a major overhaul of the facilities, if state lawmakers voted to allow some land-based gaming this year. As recently as four weeks ago, Tropicana officials were discussing the move with Baton Rouge tourism leaders.
In a conference call with analysts Monday, Gary Carano, chairman and chief executive officer of Eldorado, and Tom Reeg, the company's president, discussed the opportunities that exist to move the Belle on land. Because there's an 80,000-square-foot atrium next to the riverboat, both men said it would cost far less to move the casino on land than the $50 million to $60 million it would take for similar moves in other riverboat markets.
“We would be very happy to make that investment if we have the opportunity,” Reeg said.
In Louisiana, Eldorado already owns the Eldorado Shreveport and the Isle of Capri Casino Hotel Lake Charles. The company picked up the Lake Charles resort in 2017 when it bought the Isle of Capri for $1.7 billion.
Ronnie Jones, chairman of the Louisiana Gaming Control Board, said he received a courtesy call on Friday that the Eldorado-Tropicana deal may be announced. The gaming control board hasn’t received any official notification about the sale. “This is a long process,” he said.
Because Gaming and Leisure Properties International would be acquiring more casino properties, Jones said the Federal Trade Commission would have to approve the deal before it would be considered by state gaming regulators.
Jones said he expects the Louisiana Gaming Control board will have "a lot of questions" about one operator owning the physical assets of all three casinos in the Baton Rouge market, especially given that Gaming and Leisure Properties also operates Hollywood Casino.
When Pinnacle sold its properties to Gaming and Leisure Properties two years ago, Jones said the board was concerned about the conflicts that could happen if a casino operator wanted to make improvements to a gaming property, but the landlord didn’t want to spend the money. “As a matter of fact, we postponed making a decision on the Pinnacle sale until the board was completely and totally satisfied with the answers,” he said.
Eldorado is a “solid riverboat operator” that does a good job of reinvesting money into its Louisiana casinos, Jones said.
It’s too early to say what the Tropicana deal could mean for the Belle of Baton Rouge, but Jones said he would be surprised if Eldorado didn’t go ahead with plans to move the casino on land if it has the opportunity to do so.
“There’s a lot of fluidity in the market right now,” he said.
In addition to the Belle, the other properties Eldorado Resorts is acquiring include two in Nevada — the Tropicana Laughlin Hotel and Casino and the MontBleu Casino Resort & Spa in South Lake Tahoe — as well Tropicana Evansville in Indiana; Trop Casino Greenville in Mississippi; Lumière Place in Missouri; and Tropicana Casino and Resort, Atlantic City, New Jersey.
These properties include about 7,900 slot machines, 265 table games and 5,400 hotel rooms plus dining, retail and entertainment amenities. Upon completion of all pending transactions, Eldorado's property portfolio will feature about 26,800 slot machines and VLTs, more than 800 table games and over 12,500 hotel rooms.