Penn National Gaming gains preliminary approval to buy Tropicana

Nevada gaming regulators granted preliminary approval Wednesday for Penn National Gaming to acquire the Tropicana Las Vegas for $360 million.

The Gaming Control Board had few concerns about the transaction, which was announced in April by the Wyomissing, Pa.-based regional casino giant.

"This is good for the state and Strip," said Control Board Chairman A.G. Burnett at the hearing in Carson City.

The Nevada Gaming Commission will rule on the transaction on Aug. 20.

Penn National COO Jay Snowden told the Control Board the Tropicana fills a void by giving the company a resort on the Strip.

Penn operates 26 casinos nationwide and has a 3 million-member customer database. Snowden in a previous appearance before the Control Board said 25% of the company's customers regularly visit Las Vegas. Penn National has owned the M Resort in Henderson since 2011.

Penn attracts some of that business to the 390-room hotel-casino, but the M is about 10 miles from the heart of the Strip.

The 1,500-room Tropicana, a Rat Pack-era Strip resort, will not be rebranded as one of the company's Hollywood casinos.

Snowden said Penn will spend $20 million on the property after closing the deal to integrate the company's player database into the Tropicana.

"We believe we can improve the gaming experience on the floor," Snowden said. "Once the database has been updated, we can invite our players to visit the Tropicana."

Snowden said the Tropicana produced $100 million in total annual revenue, $40 million of which came from the casino. Snowden said Penn would upgrade the slot machine offerings.

He told the Control Board the company plans to "learn from the customers" the next steps needed for the Tropicana. He said the company could spend $200 million in the next four years to upgrade the resort.

Penn National General Counsel Carl Sottosanti said the transaction has been approved by six other states that needed to sign off on the financing.

Last month, Penn named Bob Sheldon as president of the company's Las Vegas properties. He was general manager of Hollywood Casino at Kansas Speedway, which he helped open in February 2012.

Sheldon began his gaming career in Las Vegas at the Las Vegas Hilton and with Mirage Resorts, including serving as president of the Golden Nugget Las Vegas. He also oversaw Foxwoods Resort Casino in Connecticut.

Penn National is also spending $390 million to build a Hollywood-branded Indian casino near San Diego.