Rio Casino to be sold, who will buy the property

It looks like the Rio Casino is on the market.

The property was built by the father of Anthony Marnell III. It was purchased by Harrah's Entertainment in 1999 for $888 million. The article speculates that it may go for as high as $500 million today (which probably means that Carl Icahn is not interested).

I don't think that Tony Marnell will buy his father's old property, since he has so much tied up with the M Resort. But Penn Gaming was very interested in a strip property.

Boyd owns the Gold Coast, the much smaller 700 room property next door. They still seem interested in acquiring a lot of the Station Casinos properties.

Who or what is Penn National? Thanks

Quote: Nareed

Who or what is Penn National? Thanks

Penn National is a successful regional company that made about $2.4 billion in gaming revenue in 2009. That makes them larger than either Boyd Gaming and Station Casinos in Las Vegas. They put the initial bid in on the Fontainbleau, but backed out when Carl Icahn came into the picture.


Pinnacle Gaming is another regional company which owns and operates casinos in Nevada (Reno), Louisiana, Indiana, Missouri and Argentina. In March 2010, Pinnacle opened its newest casino, River City, in south St. Louis County, Missouri. Pinnacle is also developing a casino in Baton Rouge, Louisiana.

Colony Capital owns a big piece of Station Casinos, the Hilton, and four properties in Atlantic City. They are trying to buy into Aztar Corporation which owns a big chunk of Wynn Resorts. It may explain why Wynn is thinking of moving corporate to Macau to get rid of Aztar.

I think it's a toss up between Penn and Boyd. However, with Penn expanding in the Mid-Atlantic, between their slot parlor in Md. and the addition of table games to Charlestown (soon to be Hollywood Casino) - not sure if adding a Vegas casino at the same general moment in time would work for them. That and they seem to only be willing to buy if they're the only bidder as the F'Bleu has shown.

On a side note, Frank, who do you think will buy Revel in AC? Now that Morgan Stanley has backed out, it looks like Revel is the Fountainbleu of the East. ;)

-B

Quote: toastcmu

On a side note, Frank, who do you think will buy Revel in AC? Now that Morgan Stanley has backed out, it looks like Revel is the Fountainbleu of the East. ;)

I suppose there is a buyer for every property. But most people think that Las Vegas will recover, it is just a question of when. People are less sanguine about Atlantic City. If you look at the map on my blog, the PA casinos are scheduling bus service directly into the Newark Area gambling that people will go with them just to save time on the bus. There is also service directly into the Port Authority in Manhattan, but basically you can take a bus from there to anywhere.

With MGM-MIRAGE pulling out of AC to avoid hearings regarding Macau and organized crime, and Harrah's debating about going into Asia the thought of AC expanding seems grim. Harrah's controls over 40% of the gaming revenue in AC. If they pull out like MGM did, then I don't think local companies will command the same brand loyalty as Harrah's.

Long winded way of saying I don't know about Atlantic City

ORDER OF PURCHASE IN VEGAS
1992 Harrah's Casino was 1st purchase
1999 Rio Casino 2nd purchase
2005 Ceasars Entertainment (4 casinos)
2005 Imperial Palace 7th property
2007 Bill's Gambling Hall 8th property
2010 Planet Hollywood 9th property
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Rio purchase was the first action of Gary Loveman when he was the new COO, but the future is in connected properties built around some attraction like an arena. They have 126 acres on the strip.
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Rio parking lot was prime candidate for terminal for high speed rail.

It does look as if $500million is an overestimate for this property. I think companies are going to try to get the casino for a lot less.