Gaming and Leisure may cover Bally's stadium construction gap

Gaming and Leisure Properties is prepared to cover up to $250 million in construction costs for the entertainment district surrounding the new Oakland Athletics stadium in Las Vegas. This potential financial support comes from Brandon Moore, the company's president of gaming and leisure properties, who spoke to the Las Vegas Stadium Authority last week. The funds would help Bally's Corp. address a deficit in the non-stadium elements of the project.

Bally's is constructing a $1.9 billion entertainment district around the $2.1 billion Major League Baseball stadium. This development is planned for a parcel of land on the Las Vegas Strip. Moore told the stadium authority board that his company has already set aside $125 million for this purpose. These funds remained after the demolition of the Tropicana Hotel & Casino in October 2024. The company is willing to double that loan to $250 million if certain conditions are met.

Steve Hill, the chairman of the Las Vegas Stadium Authority, called for the meeting before a board session scheduled for December 3. The upcoming session will focus on building an access plaza at the northwest corner of the site. This plaza will serve as the main entry point for ticketed fans arriving from the Strip. Hill stated that the authority wants to ensure the stadium opens on schedule in April 2028.

The need for additional funding arose after Bally's modified its plans for the entertainment zone in August. Nick Tomasino, Bally's vice president of construction, told the board that building the access plaza requires a 12 month process. This timeline includes connecting pedestrian bridges that cross Tropicana Avenue and the Strip. Tomasino said construction must begin in January 2027 to finish comfortably in the first quarter of 2028 and allow for a successful stadium opening.

The 33,000 seat stadium remains on track to open in 16 months. The Athletics organization will build the first 1,500 spaces of a planned 2,500 space parking lot on the southeast side. Bally's is expected to pay for the completion of that facility. The A's will also cover the costs for their section of the central utility plant, which provides air conditioning, electricity, and other infrastructure to the stadium.

Bally's has faced financial difficulties in recent months. Its auditors are expected to issue a warning that the company might not be able to pay its debts within the next 12 months. Such alerts can sometimes precede a bankruptcy filing. Bally's chief financial officer resigned shortly after this report was issued. The company attributes its funding issues to a dispute with the city of Chicago over the legalization of video slot machines in bars and taverns, a measure Bally's opposes.

Moore told investors during Gaming and Leisure's third quarter earnings call that the company had not yet committed additional funds for Bally's portion of the project. He described the company as optimistic about Bally's as a tenant because Bally's owns several casinos in the United States that are likely to be sold to help fund projects across the country. Colin Mansfield, an analyst with CBRE Credit Research, noted that Gaming and Leisure is in a strong position and that concerns about Bally's financial health have been misinterpreted.

Mansfield added that the financial problems are old or unrelated to the company's actual exposure to Bally's as a tenant. The stadium project continues to move forward with the current construction schedule and funding arrangements in place.