weather icon Mostly Cloudy

Tropicana may change hands, would follow recent Las Vegas sales

When the Tropicana opened in the spring of 1957, it received gushing reviews.

“The Trop hits the top in this fabled gambling city,” the Las Vegas Review-Journal declared, calling the hotel “palatial” and “fantastically beautiful” and billed to be “famous the day it opened.”

Soon enough, its mob connections also were making headlines — and now, after an up-and-down, very Vegas history, the Strip resort could again change hands.

Jay Snowden, president and CEO of Tropicana owner Penn National Gaming, told analysts during an earnings call Feb. 6 that there has been plenty of “unsolicited interest” in the 35-acre hotel-casino.

“We got another call two days ago with interest in potentially acquiring some or all of the landholdings there, so it’s very active,” Snowden said, adding the property is “extremely valuable.”

“It’s a high priority for us,” he said.

It wasn’t the first time in recent months that Snowden said buyers were eyeing the Tropicana, and it’s not clear whether the suitors want to buy the resort outright or purchase its real estate and lease it back to the Pennsylvania-based company.

But the talks come on the heels of several lucrative sales the past few years that have seen investors shell out billions of dollars for hotels on or near the Strip.

Sales streak

New York financial giant The Blackstone Group bought the Bellagio from MGM Resorts International for about $4.2 billion in cash this past fall. In a joint venture with MGM’s real estate investment trust, Blackstone also recently acquired MGM Grand and Mandalay Bay in a $4.6 billion deal.

Blackstone acquired the properties’ real estate and leased them back to MGM, which still operates the megaresorts.

Among other recent deals, Treasure Island owner Phil Ruffin bought Circus Circus and adjacent land for $825 million from MGM, and New York developer Eric Birnbaum acquired the Rio for $516.3 million from Caesars Entertainment Corp., which leased it back and will operate the resort for at least two years.

Joe Jaffoni, an investor-relations representative for Penn, said there are “no further updates or details” on a possible sale of the Tropicana.

The burst of hotel deals comes amid high visitor levels and no major resort openings on the Strip for nearly a decade — meaning no new competition lately.

Thousands of new rooms are in the pipeline, but the last newly built megaresort to debut on the famed casino corridor was The Cosmopolitan of Las Vegas in late 2010.

From mobsters to money problems

The Tropicana, which boasts 1,470 rooms, opened with 300. It featured tennis and badminton courts and a putting green, and the owners insisted gambling would be “secondary,” thus violating “all Las Vegas rules for parting the customer with his money,” a report said before it opened.

Its backers included “Dandy” Phil Kastel, who had run illegal gambling operations in New Orleans and was an associate of mobster Frank Costello. After Costello was shot and wounded in New York, police found a handwritten note on him that outlined more than $650,000 in casino take that “matched to the decimal point” the winnings at the recently opened Tropicana, casino historian David Schwartz of UNLV wrote in an article on the Mob Museum’s website.

Decades later, in 1983, one Joseph Agosto testified that he “maneuvered his way into control at the Tropicana” so he could skim money, putting a spotlight on the casino’s “infiltration by the Kansas City underworld,” The New York Times reported.

Decades after that, with the Strip firmly controlled by corporate interests, the Great Recession all but wiped out Las Vegas’ economy. The Tropicana was not spared the carnage.

Its former parent company filed for bankruptcy in 2008. After the hotel was sold in 2009, it was stuck in the red as the economy limped along, but it narrowed its losses.

The Tropicana posted a $19 million-plus loss in 2014, down from a nearly $44 million loss in 2010, according to a securities filing.

Penn National bought the resort in 2015 for $360 million.

We’ll find out soon enough whether someone buys the Tropicana. But given what it sold for last time, and what other hotels have been trading for, it’s a safe bet we would see another hefty payday on the Strip.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

Don't miss the big stories. Like us on Facebook.
Business Videos
Small business owners talk about shutdown impact
Small business owners talk about shutdown impact. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Top stories Friday April 3, 2020
Rj Business reporters Bailey Schulz, Subrina Hudson and Eli Segall talk about the top trending stories at the Review-Journal
Caesars furloughing about 90% of US workers
The furloughs come amid the COVID-19 pandemic, which has prompted all U.S. commercial casinos to temporarily shut their doors.
Amazon blocks sale of N95 masks to public - VIDEO
Amazon established a new section of its website where U.S.-accredited hospitals or state or federal agencies can apply for supplies. N95 masks, surgical masks, facial shields, surgical gowns, surgical gloves and large-volume sanitizers are among the restricted items. (Las Vegas Review-Journal)
Cars line up for over 4 miles for food
Cars were lined up along Sahara Avenue from Palace Station to South Rainbow Boulevard for food distribution sponsored by Three Square and Central Church in Henderson.
US weekly jobless claims jump to 6.6 million - VIDEO
The U.S. Labor Department reported 6.6 million people filed for unemployment insurance in the past week. A reported 10 million people have filed over the past two weeks. (Las Vegas Review-Journal)
When will self-employed get unemployment money in Nevada? - VIDEO
President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act into law March 27. It allows states to expand unemployment insurance benefits, including to independent contractors, self-employed and gig workers. (Las Vegas Review-Journal)
Free Business Updates
For more information head to: https://www.reviewjournal.com/vegas-business-updates/
Walmart’s new safety measures at stores: Checking temperatures - VIDEO
In an effort to intensify safety measures in their stores, Walmart and Sam’s Club will check the temperatures of all employees as they arrive for work. (Kevin Cannon / Las Vegas Review-Journal)
Macy’s to furlough majority of 130,000 employees amid coronavirus closures - VIDEO
On March 30, Macy’s Inc. announced their decision to furlough a majority of their employees and instead move to the “absolute minimum workforce needed.” (Las Vegas Review-Journal
An empty Las Vegas Strip from the air - Drone Video
For the first time in forever, the famed Las Vegas Strip is closed for business amid the coronavirus pandemic. (Michael Quine/Las Vegas Review-Journal)
Nevada construction continues as coronavirus spreads
When Gov. Steve Sisolak ordered Nevada businesses closed, he let construction workers stay on the job, deeming homebuilding and other construction “essential” lines of work.
US weekly jobless claims soar to record-breaking 3.28M - VIDEO
The U.S. Department of Labor released the shattering numbers on Thursday. Jobless claims had been as low as 282,000 the previous week. The 3.28 million jobless claims for last week is more than double the 1.5 million new claims that analysts were expecting. (Las Vegas Review-Journal)
Worker at Allegiant Stadium tests positive for COVID-19
Construction of Allegiant Stadium is unlikely to affected by the coronavirus outbreak that is having an impact on just about every industry across the Las Vegas Valley. (Michael Quine/Las Vegas Review-Journal)
Casino companies burning through millions daily
RJ reporter Bailey Schulz talks about how much Las Vegas Casino companies are losing and how the Emergency bill could help if they run out of money or need help recouping what was lost.
Albertsons, Walmart, Amazon increase pay amid coronavirus impact - VIDEO
Grocery stores and other retailers have raised employee pay as they work to meet customer demand during the coronavirus pandemic. (James Schaeffer / Las Vegas Review-Journal)
Las Vegas police tells nonessential businesses to respect the shutdown - VIDEO
The Las Vegas Metropolitan Police Department reminds businesses in Clark County that all nonessential businesses are to be shut down as mandated by Nevada Gov. Steve Sisolak, due to the coronavirus crises. (Las Vegas Metropolitan Police Department)
Amazon Prime delays are now as long as a month - VIDEO
As of Sunday, many nonessential items ordered with Prime delivery are showing an April 21 delivery date. (Las Vegas Review-Journal)
Fed announces unprecedented actions to stabilize markets - VIDEO
The Federal Reserve announced several new measures on Monday. Among the announced programs is a further commitment of $300 billion "supporting the flow of credit" for Main Street businesses. (Las Vegas Review-Journal)
Lee’s Discount Liquor stores close on Sunday - VIDEO
Lee’s Discount Liquor stores across the Las Vegas Valley closed at 3 p.m. Sunday, March 22, the company announced on Twitter. (Las Vegas Review-Journal)
Local Businesses Message To Customers After Closing - Video
Local movie theaters and stores leave signs on their doors for customers as businesses close after being ordered to shut down.
Valley businesses react to mandatory order to shut down - VIDEO
All non-essential businesses in the Las Vegas Valley have to shut down. We spoke with store owners who would remain open for the benefit of the community and others who were still confused as to why they had to close. (James Schaeffer / Las Vegas Review-Journal)
Nevada casino closures impact 206K workers, AGA finds - VIDEO
About 206,000 direct casino employees in Nevada are without work after Gov. Steve Sisolak’s Tuesday mandate, according to the American Gaming Association. (James Schaeffer / Las Vegas Review-Journal)
More Las Vegas Valley grocery stores offer early hours for seniors - VIDEO
A growing list of Las Vegas Valley retailers are offering special shopping hours for seniors in light of the COVID-19 pandemic. (James Schaeffer / Las Vegas Review-Journal)
Nevada casinos closing for 30 days following state order - VIDEO
Gov. Steve Sisolak’s unprecedented order on nonessential Nevada businesses will shut down 440 licensed casinos. (James Schaeffer / Las Vegas Review-Journal)
Wynn CEO and Dr. Rebecca Katz go over coronavirus - Video
The Wynn CEO Matt Maddox and Dr. Rebecca Katz give a warning about the coronavirus in Las Vegas and around the world.
The Bellagio casino floor cleared as guests get ready to leave hotel - VIDEO
The Bellagio casino floor cleared as guests get ready to leave hotel (James Schaeffer / Las Vegas Review-Journal)
Tourists upset with MGM Resorts' lack of closure notice - VIDEO
Tourists like David and Emma Walker, who are visiting from Scotland, found out about MGM Resorts' property closures through Google, instead of the Luxor where they are currently staying. The Walkers are upset with how MGM has handled the situation by not making their customers aware of the closures first. (Cassie Soto/Las Vegas Review-Journal)
All Las Vegas MGM casinos, hotels to temporarily close - VIDEO
MGM Resorts International announced Sunday it is temporarily suspending operations at all Las Vegas properties “until further notice” effective Tuesday. (James Schaeffer / Las Vegas Review-Journal)
Caesars begins layoffs during coronavirus crisis - VIDEO
Documentation obtained by the Review-Journal shows Caesars Entertainment Corp. has begun laying off employees amid reduced travel demand from the coronavirus pandemic. (James Schaeffer / Las Vegas Review-Journal)
Las Vegas land prices up more than double from recession

Investors paid a median of about $383,840 per acre last year for Southern Nevada land, up more than double from the depths of the Great Recession, according to figures from John Stater, Las Vegas research manager at brokerage Colliers International.