Publication Date: February 26, 2026, 01:26h.
Updated on: February 26, 2026, 01:26h.
- VICI Properties provides little insight on ongoing negotiations with Caesars tenant
- VICI’s CEO emphasizes a desire for a mutually beneficial resolution
- Challenges at Caesar-operated regional casinos pose risks for VICI stock
During the latest earnings call, VICI Properties (NYSE: VICI) fell short of providing investors with significant updates concerning discussions with its tenant, Caesars Entertainment (NASDAQ: CZR), leaving many stakeholders disappointed.
The frequently mentioned issue surrounding the master lease for Caesars’ regional casinos was briefly touched upon during VICI’s call, initiated by Goldman Sachs’ analyst Caitlin Burrows; however, CEO Edward Pitoniak refrained from elaborating.
“We won’t delve into specifics regarding our discussions with Caesars or what future dialogues may hold,” remarked the VICI CEO. “It’s important to note that as we tackle lease matters with Caesars, our strategy will align with our comprehensive approach to managing our portfolio and associated risks.”
The source of concern among investors in both firms is straightforward. VICI owns the real estate of a significant number of casinos managed by Caesars outside of Las Vegas. Presently, the revenues generated by these properties (EBITDA) are marginally sufficient to cover rental payments, underscoring the necessity for negotiations.
VICI Aiming for a ‘Mutually Beneficial’ Agreement
While neither Caesars nor VICI has publicly outlined possible outcomes of their negotiations, it is widely believed that compromises will be necessary for both parties to reach an agreement.
Some analysts have proposed the notion of VICI reducing rental costs on Caesars-operated regional casinos in exchange for equity or alternative compensation, but this idea remains unconfirmed by either side.
It’s evident that VICI is striving for a resolution that is advantageous for both entities and accommodates the REIT’s long-term objectives.
“The agreement we pursue with Caesars will ultimately be one that we believe benefits both parties, while also advancing our portfolio optimization goals,” added Pitoniak during the call.
VICI’s Independence from Caesars
Founded in 2017 as a spin-off from Caesars, the casino operator originally constituted the entirety of VICI’s lease agreements; however, this share has since dropped to below 40% as VICI has broadened its tenant range, adding MGM Resorts International (NYSE: MGM) and several other gaming firms.
Despite this diversification, Caesars remains the largest source of rental income for VICI, intensifying the urgency for a resolution concerning the regional casino lease agreements.
“For both Caesars and us, I genuinely believe that the best solutions will not only address lease coverage issues but will provide enhancements to both portfolios, meaning there are numerous strategies available to achieve portfolio optimization for both parties,” concluded Pitoniak during the call.