Pinnacle Bets Big on Sands

Pinnacle Entertainment(PNK Quote) said it will purchase the Sands casino and a neighboring boardwalk hotel site in Atlantic City for $270 million from billionaire Carl Icahn.

Pinnacle plans to implode the site and build a new casino resort on the 18 acres of waterfront land. The lofty price of $15 million per acre points to the popularity of Atlantic City, as the city continues a transition from its seedy past into the Las Vegas of the East. The Sands is one of Atlantic City's oldest and smallest casinos. The deal is set to close in 70 days.

The price tag includes $20 million of tax-related benefits and additional real estate.

"The success of recent Atlantic City developments has proven that customers in the Northeast respond positively to state-of-the-art gaming resort design and amenities," Pinnacle CEO Daniel Lee said in a statement.

Over the past few years, Atlantic City has seen billions of dollars sunk into new casino projects in the city.

In recent months, Pinnacle had been rumored to be interested in buying the Sands site from Icahn-controlled American Real Estate Partners(ACP Quote). On a recent conference call, Penn National Gaming(PENN Quote), which continues to look for a way to enter the Atlantic City market, said it was interested in the Sands casino but called the asking price too steep.