Penn National Gaming Wants Fontainebleau Las Vegas Project

Penn National Gaming has had a rough year much like many US-based casino operators. On Wednesday, the company announced that their third quarter profits were down almost 85% on steep charges. That left the company having to answer to investors.

On a conference call to investors, the company detailed the upside of the company. Penn National is seriously considering acquiring the Fontainebleau project in Las Vegas if they can take over at the right price. The company feels that the Las Vegas market will recover from what has been a terrible 2009.

"We believe in the future of Las Vegas," said Chairman and Chief Executive Officer of Penn National, Peter Carlino, "The current economic crisis will not last forever. Our view is that Las Vegas will in time be fine. We are concerned about the absorption of all the new units that will come to that city."

Lenders cut off the funds for the Fontainebleau project and it has caused the stoppage of construction. That stoppage also cost workers their jobs. Penn National believes that the project still could succeed, but they must get it at their price.

Currently, that price is less that $300 million. Penn National is the stalking horse bidder in bankruptcy court for the project. That means, if no other bids come in, Penn National agrees to pay the price they bid for the project.

If they win the rights to the Fontainebleau, the company believes that $1.5 billion more would have to be put into the competition of the 3,889 room hotel. Penn National is also considering other acquisitions should the Fontainebleau deal fall through.

October 21, 2009
Posted By Terry Goodwin
Staff Editor, CasinoGamblingWeb.com
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