A financing agreement between Bally’s Corp. and Gaming and Leisure Properties for a Chicago casino development could provide a road map to how Bally’s can fund the construction of a resort to replace the soon-to-be demolished Tropicana.

The companies announced a $2 billion funding and casino transaction package Friday, allowing the gaming operator to build a $1.8 billion resort in downtown Chicago.

“If this [Gaming and Leisure] owned, Bally’s-operated Chicago structure succeeds, we could see this being a template for developments on the Tropicana Las Vegas site,” Truist Securities gaming analyst Barry Jonas wrote in a research note Friday.

Bally’s plans for the site have long been described as a hotel and casino, but the company has not divulged its concepts for the acreage surrounding the planned 33,000-seat, $1.5 billion stadium to house the relocated Oakland Athletics. 

Despite the lack of clarity surrounding the casino operator’s project on the site and how to fund it, plans for the stadium are moving forward.

The Las Vegas Stadium Authority could hear initial plans later this week on how the team plans to finance its portion of the stadium development, which includes $380 million in public financing approved by state lawmakers last year.

The board’s agenda for Thursday’s meeting includes the potential approval of a development partner — Athletics StadCo LLC —  which filed its articles of organization (legal documents that establish a limited liability company) with the Nevada secretary of state on July 11.

However, the A’s have not yet explained how the team will provide $1.2 billion in private financing. A’s owner John Fisher told the San Francisco Chronicle in March that $200 million would come from debt, $500 million from his family and another $500 million from yet-to-be-determined equity investors, but nothing has been formalized.

Meanwhile, Bally’s has a long-term lease agreement for the Tropicana land, paying Gaming and Leisure $10.5 million annually. The real estate investment trust (REIT) owns the site. Despite the uncertainty of Bally’s plans, a top executive for Gaming and Leisure said in April the landlord “did not anticipate any changes to the ground rent obligations under the ground lease as a result of the closure, including any deferral or other adjustment.” 

Gaming and Leisure committed $175 million toward the demolition of the Tropicana, which closed April 2. Much of the resort’s lowrise portions have been demolished and the two hotel towers are being prepped for an implosion in late September or early October.

Bally’s, which has been criticized by investors inside and outside the company about its $3.6 billion in long-term debt and funding shortfall for its Chicago casino project, seemingly found a way to resolve its shortfall Friday through a binding agreement with Gaming and Leisure. 

Through that agreement, the REIT said it would provide $940 million in construction financing for a 500-room hotel-casino along the Chicago River. Gaming and Leisure would take ownership of the 34-acre site with Bally’s becoming the tenant. Gaming and Leisure would also help fund the development through the purchase and leaseback of two Bally’s casinos in Shreveport, Louisiana, and Kansas City, Missouri.

Once the deal is finalized, Gaming and Leisure will be the landlord to 10 of Bally’s casinos in nine states. Bally’s Lake Tahoe is owned by the Edgewood Companies, a private landowner that has owned 500 acres in the Lake Tahoe community since 1896.

“The deal gives Gaming and Leisure, predominantly a regional casino REIT, a flagship destination asset in the highly sought-after downtown Chicago area,” Macquarie Securities gaming analyst Chad Beynon wrote in a research note Friday.

He said the REIT has established “more comprehensive relationships with its casino operating tenants, including Penn Entertainment and Hard Rock International.”

“We believe this bodes well for Gaming and Leisure as these operators continue to seek alternative sources of capital to fund growth projects,” Beynon wrote.

The news Friday sent shares of Gaming and Leisure up almost 3 percent in value on the Nasdaq while Bally’s shares increased more than 6 percent on the New York Stock Exchange.

Jonas told investors that if Bally’s ever had to exit the Chicago project, Gaming and Leisure would find “demand from other well-established operators to take over at comparable terms.”