Penn National Gaming Bids On Fontainebleau Las Vegas

Penn National is still one of the biggest names in the US casino gaming industry, but that does not mean they are a company that is completely trusted. On Monday it was announced that the company has placed a bid for the soon to be auctioned off Fontainebleau Las Vegas.

The developers of the Fontainebleau have spent an estimated $2 billion on the project, but they have since gone bankrupt. Now, the almost 4,000 room hotel is set to be auctioned in bankruptcy court.

Penn National would become a "stalking horse" bidder for the property. Although the actual amount of their bid has not been announced, bankruptcy lawyer Scott Baena acknowledged that the amount was less than $300 million.

As recently as last year, Penn National's reputation was called into question. The gaming company won the right to run a casino in Kansas and signed a contract with the state only to pull out of the deal.

The reason that Penn gave for pulling out of the Kansas deal was the competition that would come from a neighboring Oklahoma tribal casino. The company did not feel their Kansas casino would be adequate enough to compete with the tribal casino.

Currently, Penn National has no presence in Las Vegas, but that would change with the acquisition of the Fontainebleau. The company has eleven casinos around the US and has been looking in the past couple of years to expand their reach.

The bankruptcy judge handling the Fontainebleau case may have perhaps known Penn National's history when he commented on the potential sale of the hotel.

"Negotiations are wonderful," said Judge A. Jay Cristol, as reported in the Miami Herald, "But we have a saying in South Florida: Show me the money."

October 6, 2009
Posted By April Gardner
Staff Editor, CasinoGamblingWeb.com
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