Tropicana Deal Brings Better Gambling
A major gambling operator, Pinnacle Entertainment Inc., primarily known for its gambling venues in the Midwest and South, recently announced the $2.1 billion purchase of Aztar Corp., a Phoenix-based gambling company with five gambling venues nationwide.
The deal is projected to create a land-based gambling network across the US, giving Pinnacle Inc. a total of twelve casinos in Indiana, Louisiana, Missouri, Nevada and New Jersey.
The acquisition is the latest in a string of mega-mergers in the gambling industry, such as the $9 billion acquisition of Caesars Entertainment Inc. by Harrah’s Entertainment Inc.’s and MGM Mirage’s $7.9 billion purchase of Mandalay Resort Group.
Two years ago, officials from Pinnacle Inc. were reported as saying that the company prefers to build new gambling venues, rather than to buy old ones, but today, they are reversing that decision, with good reason.
The Tropicana gambling casinos in Atlantic City and Las Vegas come with the deal, which will give Pinnacle a strong foothold in the two most important land-based gambling markets in the US and will rank Pinnacle Inc. as the sixth-largest gambling operator in the country. The Atlantic City Tropicana recorded $441.9 million in gross gambling take, and will bring in around one quarter of the combined revenue from the merger.
Pinnacle plans to make their first priority the rebuilding of the Tropicana’s Las Vegas gambling resort, which is reported to be badly outdated, replacing it with a new mega-gambling resort. The proposed gambling resort will take around 2 years in the planning and 5 years to build.
The gambling community hopes the merger will bring about improvement to the gambling environment at the Tropicana on the Las Vegas Strip, a market dominated by gambling giants such as Harrah’s, Boyd and Trump.
The name Pinnacle is unfamiliar to gamblers but those regularly gambling at the Las Vegas Tropicana are enthusiastic about the deal, with many suggestions for improvements to the 25-year-old gambling resort, including more gaming tables, higher-end slot machines, faster check-in times and renovated guest rooms.
Patrons are keen to see more bonuses and comps, one gambling woman reportedly said that she felt the Tropicana was a bit too stingy, and need to start giving more rewards such as perks and giveaways to high-rolling slot players.
Players in the gambling community have also called for a better non-smoking section with a tightly enforced no-smoking policy in the Tropicana as well as more ladies’ rooms.
Pinnacle’s chairman and CEO, Daniel R. Lee, reportedly stated that the company is keen to renovate the outdated guest rooms and gambling floor, with aims to lift the standards of the property to those of The Quarter, the recently-opened Cuban-themed entertainment and shopping complex.
Plans for Pinnacle’s broader gambling network will create cross-marketing opportunities, including providing plane tickets for high-end customers, which will allow gamblers to travel to any of the company’s casinos around the country.
The acquisition is slated for closure towards the end of 2006.