Vici Properties was formed as part of the Chapter 11 bankruptcy reorganization of Caesars Entertainment Operating Company (CEOC), the largest division of Caesars Entertainment. After placing CEOC into bankruptcy in January 2015, Caesars proposed splitting CEOC into two companies: a REIT, which would own the company's casinos, and an operating company, which would manage them.[4] The plan was designed to maximize value for CEOC's creditors by taking advantage of favorable tax treatment for REITs.[5] Several members of Congress opposed the plan, calling it an abuse of the REIT laws.[6] They asked the Internal Revenue Service to deny tax-free status to the spin-off, but their protest went unheeded.[6][7]
The spin-off of Vici to CEOC's creditors was completed on October 6, 2017, the day that CEOC emerged from bankruptcy.[8][9][10] Vici began with a portfolio of nineteen casinos and racetracks, all leased to Caesars at a total initial annual rent of $630 million, and four golf courses.[8][11] The company's name was adopted from the phrase "Veni, vidi, vici," commonly attributed to Julius Caesar; vici in Latin means "I conquered".[12]
Vici acquired Harrah's Las Vegas from Caesars in December 2017 for $1.1 billion, and leased it back at an initial annual rent of $87.4 million.[13][14]
MGM Growth Properties, a REIT affiliated with Caesars competitor MGM Resorts International, offered in January 2018 to acquire Vici for an estimated $5.9 billion.[15] Vici's board rejected the offer, deciding instead to proceed with a planned initial public offering.[12] Vici completed its IPO on the New York Stock Exchange in February 2018, raising $1.2 billion.[16][17]
The company moved its headquarters to New York City from the Las Vegas area in mid-2018.[18][19]
Vici completed two transactions with Caesars in 2018, purchasing the Octavius Tower at Caesars Palace for $508 million and Harrah's Philadelphia for $242 million, and leasing them back to Caesars for $35 million and $21 million per year, respectively.[20]
In 2019, Vici made two purchases in conjunction with Penn National Gaming. Vici bought the real estate of the Margaritaville Resort Casino in Louisiana and Greektown Casino–Hotel in Detroit for $261 million and $700 million, respectively, while Penn bought both properties' operating businesses and leased them from Vici for annual rent of $23 million and $56 million, respectively.[21][22][23] Vici bought a second casino from Greektown seller Jack Entertainment, Jack Cincinnati Casino, in September 2019, paying $558 million for the real estate; Hard Rock International leased the property for $43 million per year.[24][25]
In December 2019, Vici bought three casinos in Missouri and West Virginia from Eldorado Resorts in conjunction with Century Casinos: Isle Casino Cape Girardeau, Lady Luck Casino Caruthersville, and Mountaineer Casino, Racetrack and Resort.[26] Vici paid $278 million for the real estate assets, and leased them to Century for $25 million per year.[27] A month later, the company bought two more properties from Jack Entertainment, Jack Cleveland Casino and Jack Thistledown Racino, for a total of $843 million, leasing them back for $66 million per year.[28]
In July 2020, Eldorado Resorts acquired Caesars Entertainment, becoming Vici's primary tenant, and renamed itself to Caesars Entertainment.[29] In connection with this acquisition, Vici bought three properties (Harrah's Atlantic City, Harrah's Laughlin, and Harrah's New Orleans) from Caesars for a total of $1.8 billion, and leased them back to the new Caesars for $154 million per year.[30]
Starting in 2020, Vici expanded beyond the gaming sector, largely by providing construction loans for hospitality and entertainment properties, often with an option to purchase the property after completion.[31][32][33] By 2023, Vici had announced financing arrangements for Canyon Ranch spas, Great Wolf Resorts water parks, a Kalahari Resorts water park, Cabot golf resorts, and BigShots Golf driving ranges.[33][34] It also acquired the Chelsea Piers entertainment complex in Manhattan and 38 Bowlero bowling alleys.[35][36]
Vici more than doubled its size in 2022 by acquiring MGM Growth Properties and the Venetian complex on the Las Vegas Strip. Vici purchased the real estate of the Venetian complex from Las Vegas Sands in February 2022 for $4 billion.[37][38] The acquisition included the Venetian and Palazzo casino hotels and the Sands Expo convention center.[38] Apollo Global Management bought the operating business and leased the property from Vici for $250 million per year.[37]
In April 2022, Vici acquired MGM Growth Properties for $17.2 billion (including $5.7 billion in assumed debt).[39][40][41] The purchase added full ownership of thirteen properties to Vici's portfolio, and half ownership of the MGM Grand Las Vegas and Mandalay Bay resorts, and increased Vici's annual revenue by $1 billion,[42] along with making it the largest land owner on the Las Vegas Strip, with over 660 acres.[43] Vici bought out the other half of interest in the MGM Grand and Mandalay Bay from Blackstone for $1.27 billion plus $1.5 billion in assumed debt in January 2023.[44][45]
Several smaller acquisitions were made in 2022 and 2023. Vici expanded to Canada, acquiring eight casinos in Alberta from Pure Canadian Gaming and Century Casinos for a total of US$363 million.[46][47] It also added Foundation Gaming as a tenant, purchasing two casinos in Mississippi for $293 million, and acquired the Rocky Gap Casino Resort in Maryland for $204 million, in conjunction with Century.[48][49]
Properties
Leased to Caesars Entertainment
- Caesars Atlantic City – Atlantic City, New Jersey
- Caesars Palace – Paradise, Nevada
- Harrah's Atlantic City — Atlantic City, New Jersey
- Harrah's Council Bluffs – Council Bluffs, Iowa
- Harrah's Gulf Coast – Biloxi, Mississippi
- Harrah's Joliet – Joliet, Illinois (80 percent stake)[50]
- Harrah's Lake Tahoe – Stateline, Nevada
- Harrah's Las Vegas – Paradise, Nevada
- Harrah's Laughlin — Laughlin, Nevada
- Harrah's Metropolis – Metropolis, Illinois
- Harrah's New Orleans — New Orleans, Louisiana
- Harrah's North Kansas City – North Kansas City, Missouri
- Harrah's Philadelphia – Chester, Pennsylvania
- Harveys Lake Tahoe – Stateline, Nevada
- Horseshoe Bossier City – Bossier City, Louisiana
- Horseshoe Council Bluffs – Council Bluffs, Iowa
- Horseshoe Hammond – Hammond, Indiana
- Horseshoe Tunica – Tunica Resorts, Mississippi
Leased to Century Casinos
- Century Casino Cape Girardeau – Cape Girardeau, Missouri
- Century Casino Caruthersville – Caruthersville, Missouri
- Century Casino & Hotel Edmonton – Edmonton, Alberta
- Century Casino St. Albert — St. Albert, Alberta
- Century Downs Racetrack and Casino — Balzac, Alberta
- Century Mile Racetrack and Casino — Edmonton International Airport, Leduc County, Alberta
- Mountaineer Casino, Racetrack and Resort – New Cumberland, West Virginia
- Rocky Gap Casino Resort – Flintstone, Maryland
Leased to MGM Resorts International
- Beau Rivage – Biloxi, Mississippi
- Borgata Hotel Casino and Spa – Atlantic City, New Jersey
- Excalibur Hotel and Casino – Paradise, Nevada
- Luxor Las Vegas – Paradise, Nevada
- Mandalay Bay – Paradise, Nevada
- MGM Grand Detroit – Detroit, Michigan
- MGM Grand Las Vegas – Paradise, Nevada
- MGM National Harbor – Oxon Hill, Maryland
- MGM Northfield Park – Northfield, Ohio
- MGM Springfield – Springfield, Massachusetts
- New York-New York Hotel and Casino – Paradise, Nevada
- Park MGM – Paradise, Nevada
- T-Mobile Arena – Paradise, Nevada (land only)
- Yonkers Raceway & Empire City Casino – Yonkers, New York
Leased to Pure Canadian Gaming
- Pure Casino Calgary — Calgary, Alberta
- Pure Casino Edmonton — Edmonton, Alberta
- Pure Casino Lethbridge — Lethbridge, Alberta
- Pure Casino Yellowhead — Edmonton, Alberta
Leased to other companies
- Caesars Southern Indiana – Elizabeth, Indiana (leased to the Eastern Band of Cherokee Indians)
- Chelsea Piers Sports & Entertainment Complex – Manhattan, New York (leasehold interest; subleased to Chelsea Piers)
- Fitz Casino & Hotel – Tunica Resorts, Mississippi (leased to Foundation Gaming)
- Gold Strike Tunica – Tunica Resorts, Mississippi (leased to Cherokee Nation Businesses)
- Hard Rock Casino Cincinnati — Cincinnati, Ohio (leased to Hard Rock International)
- Hollywood Casino at Greektown — Detroit, Michigan (leased to Penn National Gaming)
- Jack Cleveland Casino – Cleveland, Ohio (leased to Jack Entertainment)
- Jack Thistledown Racino – North Randall, Ohio (leased to Jack Entertainment)
- Margaritaville Resort Casino – Bossier City, Louisiana (leased to Penn National Gaming)
- The Mirage – Paradise, Nevada (leased to Hard Rock International)
- The Venetian Las Vegas – Paradise, Nevada (leased to Apollo Global Management)
- WaterView Casino & Hotel – Vicksburg, Mississippi (leased to Foundation Gaming)
- 38 bowling alleys (leased to Bowlero)
Golf courses
The company owns and operates four golf courses:[51]
- Cascata – Boulder City, Nevada
- Chariot Run – Laconia, Indiana
- Grand Bear – Saucier, Mississippi
- Rio Secco – Henderson, Nevada
Former properties
- Bally's Atlantic City – Atlantic City, New Jersey – Sold in 2020.[52]
- Bluegrass Downs – Paducah, Kentucky – Closed in 2019; donated in 2020.[53]
- Harrah's Louisiana Downs – Bossier City, Louisiana – Sold in 2021.[54]
- Harrah's Reno – Reno, Nevada – Closed and sold in 2020.[55]
- Tunica Roadhouse – Tunica Resorts, Mississippi – Closed in 2020 and demolished.
We continue to believe in the strength of the Las Vegas market, bolstered by a strong post-covid recovery and robust operator outlook and continued institutionalization of this real estate asset class.”
Is Vici a Smart Investment?
As a landlord rather than a casino operator, Vici does not face the same volatility in its revenue that Caesars and MGM experience. The company essentially has its income locked in. Leases vary by tenant, but when the MGM Properties deal closed, MGM Resorts International signed a new deal with Vici that's fairly typical.
The MGM master lease, which commences as of today, has an initial term of 25 years, with three 10-year tenant renewal options and an initial total annual rent of $860.0 million. Rent under the MGM master lease escalates at a rate of 2.0% per annum for the first 10 years and thereafter at the greater of 2.0% per annum or the annual increase in the consumer price index ("CPI"), subject to a 3.0% cap.
That's essentially revenue without risk. For investors, that does somewhat cap the upside of buying Vici shares over owning Caesars or MGM, but it also minimizes the downside risk, which may be even more valuable in a time of very volatile markets.
While Caesars and MGM operate casinos, Vici Properties (VICI) owns the actual land and buildings that those casinos operate in. That's not as public a business, but the real estate investment trust has an incredible portfolio that dominates the Las Vegas Strip.
Vici recently completed the $17.2 billion acquisition of MGM Growth Properties making it by far the largest landlord on the Strip. The deal, which followed Vici's recent acquisition of the Venetian, makes the company the owner of the majority of the casinos on the Las Vegas Strip.
"The addition of the MGP portfolio, together with the recent closing of our Venetian acquisition, elevates VICI to the top ranks of American 4-wall REITs, making VICI a Top-5 REIT by earnings before interest, taxes, depreciation, and amortization, a Top-10 REIT by enterprise value,” VICI Chief Executive Edward Pitoniak said in a news release.
The new Vici has an estimated enterprise value of $44 billion after the deal closed.
“Vici now owns 10 premier resorts on the Las Vegas Strip, consisting of 1.2 million square feet of gaming space, approximately 40,775 hotel rooms, and 5.9 million square feet of meeting and convention space," Vici Chief Operating Officer John Payne in the news release.
Las Vegas has a lot of big-name operators that grab the spotlight. Caesars Entertainment (CZR) , for example, has its name splashed across its signature property, the massive Caesars Palace. It's not subtle, which makes sense given that the casino giant wants people to stay at its resorts, gamble in its casinos and, perhaps most important, join its loyalty program.
MGM Resorts International (MGM) has a similar strategy. Its name has been used liberally across its Strip properties as it follows its rival in trying to drive customers into its loyalty program. That can help fill nights in its hotels, increase in-person gambling, and drive online sports betting in places where it's legal.
These are companies that want customers and investors to know their names. Caesars and MGM dominate the Las Vegas Strip as far as the public is concerned, but neither one is actually the leading player in that incredibly valuable stretch of real estate.
That's because while MGM and Caesars operate the most casinos on the Strip (and in Las Vegas overall), another player actually owns many more properties, even if that company does not have a big public profile.
It's the city of the iconic Golden Gate, with its steep, winding streets and is, for many, the gay mecca. San Francisco has always been considered one of the most beautiful and diverse cities in the world, with enormous potential for growth and entertainment, but things may be changing. Lack of security, drugs and homelessness are plaguing the city so beloved by such greats as Rudyard Kipling, Frank Lloyd Wright and Tony Bennet. Many believe it is descending into the abyss already familiar to Detroit. Yet San Francisco shows no signs of surrender. What are the problems afflicting San Francisco today? Why does it seem to be following the same path as Detroit? How can the city government stop this drift? Today we tell you.
