Oakland A's move to Las Vegas is called a positive for some casino stocks (NYSE:BALY)
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The Oakland A's Major League Baseball team is officially on the move to Las Vegas after the owners voted unanimously to approve the relocation of the team from the Bay Area. Earlier in the year, the A's had reached an agreement with Bally's (NYSE:BALY) to build a $1.5B, 30K-seat stadium on 35 acres of the Tropicana Las Vegas site. The stadium is expected to open sometime in 2027-2028.
Macquarie analyst Paul Golding believes this MLB development represents an incremental catalyst for Las Vegas as a whole that will bolster the entertainment draw of the city, and thus benefit casino operators such as MGM Entertainment (NYSE:MGM), Caesars Entertainment (NASDAQ:CZR), Wynn Resorts (WYNN), and Golden Entertainment (GDEN).
Golding pointed to the letter of intent that states that the A's shall pay all costs associated with the design, development, and construction of the stadium, while Bally's (BALY) shall pay all costs for the redevelopment of the casino and resort. Meanwhile, Gaming and Leisure Properties (GLPI) is slated to commit to up to $175M of funding for hard construction costs. Golding sees the clarity around the Tropicana property as a positive development for Bally's Interactive (BALY).
"We believe clearing this hurdle will now allow management to assess the various paths forward for the redevelopment of the property, which could include building a large resort, finding a partner, etc. We are holding our valuation for now, but overall we believe this solidifies a better runway to deleverage and grow the company."
