VICI Properties Not Interested in Buying Caesars Indiana Properties
VICI Properties Inc. has decided not to exercise its option on a pair of Indiana racinos, namely Horseshoe Indianapolis and Harrah's Hoosier Park, both owned by Caesars Entertainment. This decision was highlighted as a focal point during the company's second-quarter earnings call held on Thursday.
Caesars Entertainment's Horseshoe Indianapolis Racing & Casino in Indiana. (Source: Paulick Report)
LISTEN TO THIS ARTICLE:John Payne, the Chief Financial Officer of VICI, stated that the company envisions a greater augmentation in portfolio value through the pursuit of acquisitions within the gaming sector that are alternatives to the aforementioned properties. Payne clarified that the forthcoming Bally's Chicago had no influence on this decision, emphasizing the presence of numerous other casinos situated between Chicago and Indianapolis that could potentially be of interest.
Related: Analysts Express Mixed Opinions on the Future of Caesars EntertainmentIn contrast to the stance on the Indiana racinos, VICI executives expressed robust optimism regarding the Las Vegas Strip. They believe this region represents a significant 45% of the company's rent income from its real estate investment trust (REIT) portfolio.
The company's proactive approach is not limited to domestic prospects; Payne also shed light on the potential opportunities in regional US casinos, particularly in states like Kentucky and Texas, which are currently considered to be on the cusp of gaming sector expansion. Furthermore, international jurisdictions that are on the brink of positive regulatory changes are also on VICI's radar for potential investments.
Edward Pitoniak, VICI's CEO, reaffirmed the company's dedication to continued investments in Las Vegas, which remains a pivotal market for the company.More Business News
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During the earnings call, VICI reported second-quarter revenue of $957 million. This marks a 6.6% increase from the previous year.
The company's net income attributable to common stockholders saw a 7.3% year-over-year rise, amounting to $741.3 million. The reported total revenue for the quarter was inclusive of $131.3 million attributed to non-cash leasing and financing adjustments, alongside $19.3 million categorized as other income.
VICI also disclosed a substantial capital expenditure (capex) investment of $700 million in the Venetian, located on the Las Vegas Strip. This investment is channeled through VICI's Partner Property Growth Fund, which is designated for funding extensive capex projects.
At the close of the second quarter, VICI's financial position included $681 million in estimated proceeds from forward-sale equity, juxtaposed against debt of $17.1 billion and $347.2 million in cash reserves. The company also reported an undrawn credit line of $2.3 billion, further bolstering its financial flexibility.
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