During the Great Depression of the 1930s, southern Nevada flourished while the rest of the nation experienced economic and social turmoil. Construction on the Hoover Dam began in 1931, drawing workers in need of jobs and economic stability. Gambling was legalized in that same year, facilitating further attraction to the city. In 1947, Benjamin “Bugsy” Siegel, who had been running the Flamingo Resort at the time, was killed, an untimely death emblematic of the inextricable ties to organized crime in the burgeoning city of Las Vegas. The “Rat Pack Era” of Las Vegas in the 1950s was also characterized by a mob presence, while representing a time of post- World War II opulence in the city. Frank Sinatra, Elvis Presley, Dean Martin, Sammy Davis Jr., and many other A-List entertainers were frequent fliers to the Nevada desert. In 1969, the Nevada Legislature passed a law easing the way for corporations to own casinos, which aided the involvement of corporate figures such as Howard Hughes. Additionally, when Congress passed the Racketeer Influ- enced and Corrupt Organizations (RICO) Act in 1970, the Justice Department finally had the legal backing to fight crime in Las Vegas, and the mob presence faded. The visionaries that built the Las Vegas we know today began to emerge: • In 1962, Kirk Kerkorian recognized the potential of the city when he purchased 80 acres of land across from the Flamingo • In 1966, Jay Sarno ignited the flame of the themed resort era when he built Ancient Rome-inspired Caesars Palace on land leased from Kerkorian
• In 1967, Steve Wynn arrived and over the next several decades, he was undeniably instrumental in growing the city’s global appeal as a destination for entertainment, design, art and luxury • In the late 1980’s, Sheldon Adelson joined the scene when he purchased the Sands Hotel and Casino, which in the late 1990s was transformed into The Venetian • In 1998, Gary Loveman entered from the world of academia and introduced his methodical, data-driven approach to the casino business and, in the same year, Jim Murren joined MGM from Wall Street tasked with mining for value Fast-forward to October 6, 2017, when VICI Properties was formed. A few years prior, in 2015, Caesars Entertainment Operating Company (“CEOC”) filed for Chapter 11 bankruptcy and, after 2 years of intense negotiations and creative dealmaking, CEOC (the “OpCo”) emerged from bank- ruptcy and VICI (the “PropCo”) was born. Ed Pitoniak, an experienced executive in hospitality and real estate, was brought on as VICI’s CEO; John Payne, who spent decades in operations at Harrah’s and then Caesars, was named President and COO; and David Kieske, a former real estate investment banker, was hired as CFO. A few months later, Samantha Gallagher, an attorney with extensive REIT and public company experience, was named General Counsel. All four executives remain in those roles today. When VICI was formed, it owned 19 properties and Caesars was its only tenant. It was loaded with a complex, highly leveraged capital structure, but in its first 100 days, the management team was able to reduce its leverage ratio by about 3 turns, and VICI was publicly listed on the New York Stock Exchange on February 1, 2018 in the 4th largest REIT IPO at the time.
6
VICI LAS VEGAS
Made with FlippingBook - Online catalogs