Vegas' troubles dismissed unimportant in earnings discussion by Vici
Vici Properties Expresses Optimism for Long-term Growth in Las Vegas
Vici Properties, the owner of iconic Las Vegas properties like The Venetian, has expressed optimism for the long-term growth prospects of commercial casinos in the city. In a recent financial update, CEO Edward Pitoniak highlighted the city's better long-term booking visibility compared to other markets [1][3].
The company's financial results show a 4.6% increase in quarterly revenue and nearly 5% growth in adjusted funds from operations (AFFO) per share year-over-year, demonstrating continued momentum in their casino-related real estate portfolio [1][2][5].
Pitoniak emphasized that brick-and-mortar casinos employ more people than online casinos, and investors should be selective in the regional gaming landscape. He also stated that Vici will monitor each opportunity carefully [3].
John Payne, the COO of Vici Properties, downplayed concerns about a 11% drop in Las Vegas visitation in June, referring to it as "a period of normalization" during the second-quarter earnings call [4]. He also expressed confidence in Las Vegas' long-term growth and the city's position as a global epicenter.
Moreover, Payne highlighted the ongoing expansion of Station Casinos as a reason for enthusiasm. He also cited Formula One, the Brightline train, and an in-progress baseball stadium as "long-term tailwinds" for Las Vegas [3].
The potential of the undeveloped Caesars Entertainment real estate near the Strip was also mentioned as a land bank by Pitoniak [3]. Vici Properties has not decided on whether to exercise its option on the Caesars Forum convention center in Las Vegas.
Payne also expressed confidence in the performance of Vici Properties' assets in Canada. He praised the casino industry for its habit of reinvestment, stating that Vici's buildings are unlike any other category [3].
To receive a premier valuation on Wall Street, a growth strategy is necessary, according to Pitoniak. He emphasized the company's expansion of partnerships, such as with Red Rock Resorts and other investors, as a focus on diversified development projects to support growth [1].
Pitoniak also expressed determination to resolve technical issues during future calls. He referenced Rhode Island's motto, "a lively experiment," in discussing the evolution of American gaming, noting that when Vici Properties started, there were no states with igaming [2]. However, he expressed concern about the proliferation of igaming and its impact on Vici Properties' tenants.
All major operators in Las Vegas are confident, according to Payne, due to attendance projections for upcoming sports contests and events [3]. Despite short-term tourism fluctuations, Vici Properties' efficient business model and situational readiness enable sustained earnings growth, reflecting confidence in the Las Vegas Strip's long-term potential.
- Vici Properties' optimistic outlook for long-term growth extends not only to their casino-related real estate portfolio in Las Vegas but also to the broader business landscape of the city, including the casino-and-gambling sector.
- As part of their growth strategy, Vici Properties has been actively exploring opportunities in the casino-and-gambling industry, such as the undeveloped Caesars Entertainment real estate near the Strip and potential expansion in other markets, highlighting their strategic involvement in the finance of commercial casinos.
