Sports Betting Will Drive Capital Back to Casinos, Vici CEO Says
Pandemic Causes Surge in Interest That Could Benefit US Venues Planning for Return of Visitors
Casino operators are looking to sports betting to bring good luck as gaming venues reopen for business.
There’s optimism flashing bright again in Las Vegas, evidenced by Vici Properties’ announcement this week that it agreed to acquire the Venetian Resort and Sands Expo and Convention Center for $4 billion.
Bolstering the reason for the deal was an unforeseen outcome of the pandemic: the boost casinos in the U.S. gambling capital and across the country have received from sports betting, which grew in popularity with entertainment-starved audiences during 2020.
Now that the economy appears to be rebounding, Ed Pitoniak, Vici’s CEO, sees the surge as powering a larger audience for in-person gambling and one that expands the opportunity for increased valuation and institutional ownership of casino properties.
“Where we think the greatest promise lies for us is in and around sports betting, both the online component and the in-property component,” Pitoniak told CoStar News in an interview. “Sports betting gives American gaming operators a chance to participate in one of the two great conversation topics in American society: One of those topics is weather, the other is sports.”
Nevada’s sports betting revenue in January of this year totaled $52.38 million, 160% more than the same month last year before the pandemic hit, according to the state’s Gaming Control Board. That has been the bright spot for Las Vegas casinos, which, though reopened since last summer, have been operating on a limited basis. All other major sources of betting revenue categories, including slots and table games in the same month, are still down from 17% to 74% over the same month a year ago.
Americans also have more money to spend, with the Commerce Department reporting Friday a 10% jump in personal income thanks to a new round of federal stimulus checks.
Tenant Pursues Sports Gambling
Publicly traded Vici is a real estate investment trust formed in 2017 as a spinoff from Caesars Entertainment. It owns 28 gaming facilities and four golf courses across the country.
The REIT will be adding to that total if its agreement to buy the Venetian, owned by Las Vegas Sands, is completed.
As part of the deal, funds managed by affiliates of Apollo Global Management are expected to acquire the operating company of the Venetian for $2.25 billion. It will lease back the properties from Vici.
Caesars is currently Vici’s largest tenant and is making a huge push into sports gambling. This past December, Caesars cleared the antitrust waiting period for its proposed $3.69 billion acquisition of William Hill, putting it one step closer to creating a U.S. sports betting behemoth.
London-based William Hill currently operates 113 race and sportsbooks in Nevada and has the state’s leading mobile sports betting app. In addition, the company runs racetracks in New Jersey and is licensed to operate sports betting in numerous casinos in states across the county. It also serves as the exclusive risk manager for the sports lottery in Delaware.
Vici Properties CEO Ed Pitoniak believes sports betting will help the gaming industry recover from the pandemic.
The breadth of market Caesars is developing is important to Pitoniak.
“Every time Caesars gets mentioned on ESPN, it is giving Caesars a share of voice, it is giving gaming a share of voice,” he said. “Share of voice drives share of mind. And when it comes to consumer discretionary spending — both of spending time and spending money — those who have the greatest share of mind tend to then generate a greater share of market.”
That kind of exposure should translate directly into increased value for Vici’s properties, Pitoniak argued.