VICI Properties (NYSE: VICI) gained’t train its rights to accumulate the property property of two Indiana gaming venues at present owned and operated by Caesars Leisure (NASDAQ: CZR).
Hoosier Park in Indiana. VICI Properties is declining rights to accumulate that venue and Harrah’s Indianapolis. (Picture: The Herald Bulletin)
On the corporate’s second-quarter earnings convention name late Wednesday, CEO Edward Pitoniak advised analysts the actual property funding belief (REIT) gained’t be buying Harrah’s Hoosier Park and Horseshoe Indianapolis, previously often known as Indiana Grand.
Our conviction that we will proceed to establish and spend money on experiential properties which can be accretive in opposition to a number of high quality components is a key cause that we’ve got determined that we’ll not be exercising our name proper to accumulate Harrah’s Hoosier Park and Horseshoe, Indianapolis,” stated Pitoniak on the decision. “We are able to and are making this resolution due to our confidence and conviction that we’re actively figuring out and pursuing funding alternatives that allow us to generate future AFFO progress and accretion.”
VICI’s name choice on the pair of Indiana casinos stems from the 2020 merger that created “new Caesars.” When Eldorado Resorts introduced its $17.3 billion takeover provide for the “previous Caesars” in June 2019, it struck an settlement with VICI whereby the gaming firm might promote or the REIT might purchase these property between Jan. 1, 2022, and Dec. 31, 2024.
VICI Seeking to Diversify Its Tenant Base
Caesars and VICI have a long-standing because the latter was spun-off from the previous in 2017. Right now, the REIT counts the on line casino operator as amongst its largest shoppers.
Nonetheless, tenant diversification is pivotal in business actual property and Pitoniak indicated that’s one cause why VICI handed on Harrah’s Hoosier Park and Horseshoe Indianapolis. Together with Caesars Palace on the Las Vegas Strip, VICI owns the property property of 18 Caesars-operated venues. Add within the REIT’s relationship with MGM Resorts Worldwide (NYSE: MGM) and its gaming tenant roster is essentially dominated by these two operators.
Regional issues could have performed a component in VICI declining the rights to purchase Harrah’s Hoosier Park and Horseshoe Indianapolis. The owner already owns the actual property of Caesars Southern Indiana and Horseshoe Hammond. The previous is operated by the Jap Band of Cherokee Indians.
“Right now, we imagine that we’ve got the chance to create larger portfolio worth by allocating VICI’s capital to different gaming and nongaming alternatives the group is actively pursuing,” added Pitoniak.
Caesars Unlikely to Put Indiana Casinos to VICI
Within the aforementioned 2019 settlement, Caesars gained the proper to place the 2 Indiana gaming venues to the REIT, however as VICI President and COO John Payne famous on the convention name, Caesars CEO Tom Reeg has persistently stated the gaming firm is unlikely to train that choice.
Reeg has additionally expressed a willingness to promote casinos that Caesars considers “non-core”, however the firm hasn’t stated publicly if it believes Harrah’s Hoosier Park and Horseshoe Indianapolis match that invoice.
On Thursday, Caesars introduced the sale of the World Sequence of Poker (WSOP) to funding agency NSUS Group Inc. for $500 million. Underneath the phrases of that deal, the on line casino large will retain rights to host WSOP tournaments at its land-based gaming venues.
