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Gaming and Leisure Properties (NASDAQ: GLPI) previously said it will commit $175 million in financing for a baseball stadium at the site of Tropicana on the Las Vegas Strip. However, an analyst who covers the company believes that the figure could move higher if needed.

Following meetings with Gaming and Leisure executives at the recent Global Gaming Expo (G2E) in Las Vegas, JMP Securities analyst Mitch Germain had a refreshed perspective. He came away with the view that the Pennsylvania-based gaming real estate investment trust (REIT) is bullish on the Las Vegas ballpark plan and could be compelled to make a larger investment in the project.

(GLPI management) was enthusiastic about prospects for participation at the project in larger scale, above the original $175 million commitment,” Germain wrote in a recent note to clients.

Currently, GLPI owns the property assets of 59 gaming venues across 18 states.

Gaming and Leisure Talks Tropicana
GLPI has a well-known preference for regional casino real estate, but it does own the property assets associated with the Tropicana on the Las Vegas Strip. That could position the REIT to benefit should the Oakland Athletics execute a long-telegraphed move to Sin City. Bally’s, the operator of Tropicana, and GLPI have agreed to fund up to $175 million worth of property improvements in exchange for a rent increase.

Assuming that the plan is to demolish the Tropicana, one of the more venerable Strip casinos, to make way for a baseball stadium  — and all signs point to that happening — Bally’s would have to be compensated in some form. Tropicana is Bally’s only Las Vegas ven ue.

In April 2021, Bally’s acquired Tropicana’s non real estate assets from Gaming and Leisure Properties (NASDAQ: GLPI) in a transaction valued at $308 million. As part of that deal, the gaming company sold the property assets of venues in Colorado and Illinois to the GLPI real estate investment trust (REIT) and agreed to lease back those properties. Bally’s has a 50-year lease for Tropicana, starting at $10.5 million annually.

Germain noted that GLPI management pointed out there could be avenues through which Bally’s could redevelop Tropicana after the stadium is constructed.

“Management alluded to several moving pieces about not only the stadium, but the potential for Bally’s to redevelop the Tropicana site,” added the analyst.

Expect More Clarity Soon
More clarity on the Las Vegas stadium project and the future of Tropicana could emerge imminently. The A’s are appearing before the Las Vegas Stadium Authority for the first time on Wednesday.

GLPI delivers third-quarter results Friday, and analysts will likely query management regarding the stadium plan and the future of Tropicana. Comments to this effect aren’t yet official, but demolishing the casino hotel is inevitable.

Last year, Bally’s Chairman Soo Kim told reporters the company is eyeing significant changes at Tropicana, and that demolition and rebuilding of the property are possible