Tropicana Las Vegas will have a new owner.
Penn National Gaming on Friday announced an agreement to sell the Las Vegas property’s real estate assets — including land and buildings — to Gaming & Leisure Properties in return for $337.5 million in “rent credits.”
As part of the deal, Tropicana will continue to be operated by Penn National and the credits will go toward future rent payments.
The deal, according to Penn National CEO Jay Snowden, was designed in part to allow the company to become more liquid as its 41 properties across the country remain closed because of the coronavirus pandemic.
In a statement, Snowden thanked Gaming & Leisure Properties officials for being “creative” in brokering the deal.
“Like many others in the gaming and hospitality sector, we are making difficult decisions to help preserve our liquidity and ensure a brighter future for our company’s team members, customers, shareholders and other key stakeholders,” Snowden said in a statement. “While this transaction will help to relieve liquidity pressure in terms of rent obligations, we are committed to taking further steps to reduce our ongoing operating expenses.”
In addition, Penn National, which also owns M Resort, announced that about 26,000 of its employees will be furloughed beginning April 1. That represents most of its workforce. Employees will keep health benefits through June 30.
“This decision was extremely difficult to make for all of us at Penn,” Snowden said. “Penn National is a family, and we deeply regret the hardship this will place on you and your loved ones. We are extremely motivated and focused on reopening our properties as soon as it is safe and legal to do so.”
The deal between Penn National and Gaming & Leisure Properties includes a new lease for a planned casino in Morgantown, Pa., and an option that would allow Penn National to acquire the operations of a Maryland casino at a future date.
The company plans to also implement “meaningful” pay cuts for Penn National executives and members of property and corporate leadership teams beginning April 1.
Similar to other gaming companies, Penn National has created an emergency employee relief fund. That fund, according to the company, has about $1.2 million in it as of Friday.
That money is designed to go to displaced workers and “local relief organizations” in the different communities where the company runs casinos.