Golden Entertainment last week became the latest Las Vegas casino operator to follow the sale-leaseback trend. It agreed to sell and lease back the real estate assets of seven southern Nevada casinos, including the STRAT Hotel, Casino & Tower, to real estate investment trust VICI Properties for $1.16 billion.
The deal represents a significant shift for locals-focused Golden and allows VICI to penetrate further into the Las Vegas locals market, which has seen great success since the start of 2024. Under the terms of the deal, publicly traded Golden will now be taken private by chairman and CEO Blake Sartini.
Golden shareholders will receive a fixed exchange ratio of 0.9 shares of VICI stock and a cash distribution of $2.75 per share held at closing from Sartini. The overall consideration of $30 per share represents a 40% premium to its 5 November closing price, the day before the the deal was announced.
The company will continue its quarterly $0.25 per share dividends through closing, which is set for mid-2026. VICI agreed to pay up to $426 million of the operator’s current debt. Notably, the deal includes a “go-shop” clause that allows Golden to solicit “alternative acquisition proposals from third parties” through 5 December, the company said.
“We are pleased to combine our high-quality Nevada casino real estate with one of the most attractive experiential real estate platforms in the country and partner together to unlock value in our company and explore future opportunities,” Sartini said in a staetment.
VICI President John Payne added that his firm has “sought exposure to the attractive Las Vegas Locals gaming market since our inception”. He described the market as having “sticky, durable customer bases”.
Downtown and locals market increasingly attractive
The health and long-term prospects of Las Vegas’ economy have generated much debate in 2025. After multiple record years post-Covid, the city is feeling the effects of declining visitation and volatile gaming revenue. From a business perspective, perhaps the most notable trend to arise from these conditions has been a resurgence of the downtown and locals markets as consumers seek more value-oriented options.
According to the Nevada Gaming Control Board, downtown Las Vegas finished +2% year-over-year in revenue for fiscal year 2025, and the locals market was +5%. The Strip, by contrast, was -3%. Even when the Strip had its best year ever in FY24, downtown was still +2% and the locals market was +7%. Locals revenue in particular is nearing $2 billion per year, easily the second-biggest total in Nevada behind the Strip.
REITs like VICI and Gaming and Leisure Properties have amassed a large portion of Las Vegas’ casino assets through sale-leaseback deals in recent years. But as such assets become increasingly scarce, firms have had to devise new growth avenues and funding mechanisms. VICI’s portfolio features more than 50 casinos in 15 states, but in Vegas it had notably lacked a downtown or locals property.
“This transaction diversifies VICI’s real estate ownership in Nevada, an attractive gaming jurisdiction due to its stable regulatory environment and low tax rate,” the company said in a release. “The transaction also provides VICI with exposure to the Las Vegas locals market, which was the second largest gaming market in the US in 2024 by gross gaming revenue. The locals market has long been targeted by VICI due to its key characteristics of consistent and stable growth, strong demographic and demand tailwinds driven by population trends, and high barriers to entry.”
Will private ownership help Golden Entertainment?
VICI acquired the land assets for the following properties from the following markets:
- The STRAT Hotel, Casino & Tower, north Las Vegas Strip
- Arizona Charlie’s Decatur, locals market
- Arizona Charlie’s Boulder, locals market
- Aquarius Casino Resort, Laughlin
- Edgewater Casino Resort, Laughlin
- Pahrump Nugget Hotel & Casino, Pahrump
- Lakeside RV Park & Casino, Pahrump
In total, the properties include 6,000 hotel rooms, 4,306 slots and 78 tables. VICI is charging Sartini an overall master lease of $87 million per year, with a 30-year term and four five-year renewal options. The rent will increase by an annual rate of 2% starting in year three.
The STRAT is the highest-profile asset among them, though it has had something of a snake-bitten history. Since opening in 1996, the property’s famous tower has become a staple of the Las Vegas skyline. The 1,149-foot tower is the tallest free-standing observation tower in the US and the tallest structure in Nevada. But its location on the far north end of the Strip has always been its biggest hurdle, as it is essentially between the Strip and downtown.
Consultant and former regulator Richard Schuetz was brought in as president of the STRAT in its first year to help stabilise operations after a rocky opening. He told iGB that the tower is an “unbelievable” asset and tourist attraction, but that appeal might have a shorter lifespan than a typical resort that can remodel and reinvent itself more over time. Further, its location apart from the rest of the Strip means it “just doesn’t get that walking traffic” that feeds other properties.
“It’s kind of in no-man’s land,” Schuetz said.
Sartini will now try to maximise the properties’ value under private ownership. Golden’s casino-resort segment saw revenue and EBITDA declines in Q3 and its locals casino segment was flat.
Most locals operators have steered clear of REITs
By diving into the sale-leaseback trend, Golden Entertainment is breaking from its contemporaries. The other two main locals operators in the region, Red Rock Resorts and Boyd Gaming, have so far abstained from selling their real estate. Both companies have enjoyed massive success in the last two years with a notable lack of rent escalators.
Sale-leaseback transactions give operators a huge cash infusion that helps in the short to medium term, especially when multiple projects are in need of financing. But once that money is spent, the future expenses only go up. And most locals operators are inherently conservative, meaning their finances are not as stretched as might be the case for international firms.
“With the strength of our balance sheet, the strength of our cash flows and our ability to access other forms of financing, we just don’t have a need [for REITs],” Boyd CEO Keith Smith told the Nevada Independent in 2023.
Red Rock is even more opposed to REITs, as the company has long deployed the strategy of acquiring and holding real estate for future projects. According to its Q3 investor presentation, the company holds 461 acres of undeveloped land in Nevada worth an estimated $950 million.
Sartini and Red Rock are closely connected – the Golden CEO is the brother-in-law of Red Rock bosses Frank and Lorenzo Fertitta. Earlier this year, there was some intrigue about the fact that Red Rock launched a new tavern brand, called Seventy Six, which now directly competes with Golden’s tavern business.
When asked on an earnings call about the added layer of competition, Sartini said Golden’s “size and our brand is a significant competitive advantage”.
Golden Entertainment made a bold move by selling its real estate to VICI Properties, a rarity among Las Vegas locals operators.