(Erik Kabik/AP)

Six years after foreclosing on the Las Vegas property that became The Cosmopolitan, Deutsche Bank is ending its legal odyssey in the desert by selling the 2,995-room casino and resort to The Blackstone Group for $1.73 billion in cash.

The deal comes as the Las Vegas region continues to grapple with the fallout from a financial crisis that caused Sin City’s gambling trade to falter, its real estate values to plummet and local construction projects to grind to a halt.

Deutsche Bank took over one of those projects after real estate developer Ian Eichner defaulted on a $760 million loan tied to The Cosmo development in 2008. The German banking giant chose to finish the job rather than try to sell the half-finished property in a moribund market.

After settling a trademark infringement suit with Cosmopolitan magazine owner Hearst Communications over the use of the Cosmopolitan name, Deutsche Bank opened the casino in December 2010. (Kilpatrick Townsend & Stockton represented Hearst in the litigation; Deutsche Bank turned to New York’s Fross Zelnick Lehrman & Zissu.)

But with The Cosmo continuing to lose money, Deutsche Bank apparently decided that owning a gambling palace was a bad bet. Now Blackstone has emerged to take the casino off the bank’s hands, reportedly beating out such private equity rivals as Apollo Global Management and TPG Capital and gaming behemoths like Caesars Entertainment and Crown Resorts.

Simpson Thacher & Bartlett is advising longtime client Blackstone on the private equity firm’s first gaming industry acquisition. Simpson real estate chair Gregory Ressa is leading the firm’s team on the matter, which also includes real estate partner Eric Quarfordt, M&A partner Brian Stadler, tax partner Nancy Mehlman and executive compensation and employee benefits partner Gregory Grogan.

Simpson and Ressa have previously advised Blackstone on several major real estate transactions, including a $4 billion restructuring for former portfolio company Hilton Worldwide in 2010, the private equity firm’s $9.4 billion purchase of 588 U.S. shopping centers in 2011, its $1.9 billion buy of Motel 6 and $1.2 billion acquisition of Apple REIT Six in 2012 and its $1.46 billion sale of 30 shopping centers last year.

Blackstone still needs to clear several regulatory hurdles before completing its purchase of The Cosmo. The tasks ahead include obtaining a Nevada gaming license to operate the resort and casino, which is located on the Las Vegas Strip.

Judy Turchin, managing director, general counsel and chief administrative officer of Blackstone’s real estate group, has taken the lead in-house on the deal. Blackstone hired former Simpson global head of M&A John Finley in 2010 to serve as chief legal officer, replacing former senior Simpson M&A partner Robert Friedman, who now serves as a senior adviser to Blackstone. (Former Canadian prime minister and Norton Rose Fulbright senior partner M. Brian Mulroney is a member of Blackstone’s board of directors.)

Skadden, Arps, Slate, Meagher & Flom global head of real estate Harvey Uris, real estate partner David Nagler and financial institutions partner David Ingles are advising Deutsche Bank on The Cosmo sale. Skadden has handled a variety of matters for the Frankfurt-based bank, and Anthony Pearl, general counsel and chief compliance officer for The Cosmo, once worked at the firm.

Shearman & Sterling previously advised a Deutsche Bank affiliate on the workout and foreclosure proceedings that led to the $3.9 billion in construction financing used to build The Cosmo, whose parent company is called Nevada Property 1 LLC. Georg Thoma, a senior M&A partner in Shearman’s Frankfurt office, was appointed to Deutsche Bank’s supervisory board last year. (The bank paid Thoma nearly $160,000 last year for his work, according to U.K. publication Legal Week.)

Richard Walker, a former top SEC official, has served as Deutsche Bank’s general counsel since 2001. Walker weathered a storm of criticism earlier this year over his role as in-house legal chief as the bank grappled with investigations into rate-rigging and civil suits in the U.S. related to its handling of mortgage-backed securities. Joseph Polizzotto serves as Deutsche Bank’s managing director and general counsel for the Americas.

Bloomberg reported earlier this month that Deutsche Bank was also struggling with the intricacies of running a casino, particularly a dispute with New York-based labor union Unite Here whose representation of culinary workers seeking a new contract had began to cause the casino political problems in Washington, D.C.

Tax filings filings and records on file with the U.S. Department of Labor show that Unite Here paid Davis, Cowell & Bowe, a firm with offices in Las Vegas and San Francisco, a total of $1.9 million in 2012 and 2013 for legal services.

The Cosmo isn’t the only gaming property on Deutsche Bank’s books. The bank, which is seeking to divest itself of noncore assets, picked up a 25 percent stake in Las Vegas-based Station Casinos after the troubled casino operator emerged from Chapter 11 proceedings in 2011 under a $4 billion reorganization plan, according to our previous reports.