Vici properties owns it all

Question

Excited to return to Vegas after a 6 year spell, I flood myself with all things Vegas.

Reading about MB on Wikipedia, I learned that Vici Properties owns all the CET and MGM properties and leases them to the respective companies.

Seems crazy one company owns most of the strip

Answer

It's definitely an interesting dynamic in the Las Vegas resort and casino industry. Vici Properties does indeed own a significant portion of the land on the Strip, including many of the most iconic and well-known resorts and casinos. They lease these properties back to the operating companies like MGM Resorts and Caesars Entertainment (CET), which handle the day-to-day operations of the hotels, casinos, and other attractions.

This business model is known as a "real estate investment trust" (REIT), and it’s become more common in recent years. Vici Properties essentially owns the real estate itself (the land and the buildings), while the operating companies lease the properties and run the hotels and casinos. This setup allows Vici to generate consistent rental income, while MGM and Caesars focus on their operational profits.

Some of the notable properties that Vici owns and leases to other companies include:

The Venetian and Palazzo (leased to Apollo Global Management, who operates them under the Venetian brand)
Caesars properties like Caesars Palace, Paris Las Vegas, and Harrah’s
Many MGM properties like MGM Grand, Mandalay Bay, and Luxor
Some smaller properties and other assets that are part of the Caesars and MGM portfolios

The reason this arrangement might seem "crazy" or surprising is that a single company now controls such a significant amount of the land on the Strip. However, it's a strategic move for both Vici and the casino operators, as it allows for easier capital management and real estate investment without the operational risk and overhead. It also ensures Vici Properties gets a stable stream of rental income from the real estate, while the operators like Caesars and MGM can focus more on running the casinos and resorts themselves.

In the past, many casinos owned both the real estate and the operating businesses, but the REIT model has become more popular in recent years because it allows companies to offload real estate assets while still maintaining operational control. So while it may feel like one company owns the Strip, the operational control is still in the hands of the companies you know, like MGM and Caesars.

It’s certainly a fascinating part of how Las Vegas has evolved, and it might change the way you think about the city the next time you're there!