Published on: November 8, 2024, 04:27h.
Last updated on: November 8, 2024, 04:27h.
For many years, the gaming equities market was dominated by casino stocks, but recently online sports betting and real estate companies have significantly impacted the landscape.
There are two publicly traded casino landlords, VICI Properties (NYSE: VICI) and Gaming and Leisure Properties (NASDAQ: GLPI), which are real estate investment trusts (REITs) spun off from casino operators.
Investors find their business model attractive as they collect rent without relying on casino traffic or player losses at the tables. Tenants are responsible for property enhancements and maintenance.
In 2023, VICI’s revenue climbed by 35.8%, driven by aggressive acquisitions,” said Drew Anderson, product analyst at VanEck. “They have diversified revenue streams beyond gaming, acquiring assets like Bowlero bowling centers and the Chelsea Piers complex in New York.”
VICI owns Las Vegas Strip casino real estate, including Caesars Palace, MGM Grand, and the Venetian.
Advantages of Casino Real Estate Stocks
Gaming and Leisure and VICI offer investors benefits such as inflation protection, interest rate sensitivity, and stable revenue streams from long-term leases with gaming companies.
REITs like GLPI and VICI benefit from long-term leases where tenants cover expenses and provide predictable rent checks.
Both VICI and Gaming and Leisure have outperformed Caesars and Penn since being separated from those casino companies.
Online Sports Betting Growth
Since the 2018 Supreme Court ruling, online sports betting has expanded in the US, with companies like DraftKings (NASDAQ: DKNG) and Flutter Entertainment (NYSE: FLUT) dominating the market.
Online betting is increasing and expected to continue growing, especially if more states approve iGaming along with sports betting.
The growth of online wagering is set to continue as more states embrace iGaming and sports betting.