Summary
Could the timing for a purchase by Penn National entering the Las Vegas gaming arena be slightly premature for them. Is this truly the market area that would fit into their family of properties? Can this be a mistake on their part, by looking into a type of higher end gaming establishments?
Analysis
Peter Carlino, top man at Penn National, seems to be at it again -looking into a Las Vegas hotel/casino property. He said he is waiting for either MGM or Harrah's to get desperate enough to fire sale some of their Las Vegas properties. It's a good wish, but I don't see that on either agenda from these gaming companies. It is true that there may some credence to the assumption that properties on the Strip may have a price tag on them. Don't look for any fire sales from MGM or Harrah's. If the scenario does dictates that either company decides to sell one or more of their Las Vegas properties it will certainly not be a distress sale. They would certainly hold out for as close to market value as possible. It would be good to see Penn National get involved in Las Vegas. It remains to be seen if they are actually ready to get involved in a much higher limit playing arena. That's not to say, that they are unable to to operate properties like the strip has to offer. The real question might be, do they want the type of gaming exposure that comes with strip properties.
Mr. Carlino said that his target would be mid line properties. It may be a more feasible start if they look into other venues here in Las Vegas. The one that comes to mind at the moment would be the Rampart, Cannery and the new East Side Cannery. These are local properties that would give them solid entry into Las Vegas gaming and could be a better fit than a three or four thousand room hotel on the strip. It should be noted that James Packer of Crown Properties had recently dropped his plan to purchase these very same hotels.
I don't have any real problem with Penn National entering the strip gaming arena. It's a matter of what direction Peter Carlino wants to take his company... I don't know at this point if this is just hot wind blowing out of Penn or if they are really serious this time around......
