The 2026 Las Vegas convention season opened yesterday with the start of CES’s annual event. CES, which stands for Consumer Electronics Show, is a big deal in the tech space.
To quote the event organizers – Consumer Technology Association, or CTA – it’s “the world’s most powerful tech event… bringing together global companies, innovative startups, industry executives, global media, and government leaders to experience the next-generation of tech that will solve global challenges.”
“Solve global challenges” is usually a dead giveaway that a PR consultant wrote the statement – sounds great but is just vague enough to mean nothing at all.
CES is really an opportunity for many of the tech firms to showcase their latest products… and make a whole lot of money in the process. Not that there’s anything wrong with that, of course.
A major theme this year (perhaps unsurprisingly) is AI and robotics. Bathroom-cleaning robots, kickboxing robots, ping pong-playing robots – all of it was on display.
But for today’s Wide Moat Daily, I’m more interested in the city where it all takes place – Las Vegas, which has been home to CES since 1998.
The Big Banks’ Take on Las Vegas
Las Vegas has had its ups and downs.
It suffered during the 2020 shutdowns, for instance… and many businesses are still building back up after that.
Even for 2025, Deutsche Bank (DB) just reported that it was “an uneven year for gaming & lodging C-corp stocks.”
More specifically:
If you were an operator with Macau exposure, [Las Vegas] locals, or high-end lodging exposure, you broadly performed relatively well. Conversely, those with lower-end gaming and lodging exposure, or gaming [real estate investment trusts (REITs)], broadly underperformed… While in the digital segment, performance was bifurcated, with the [business to business] digital companies outperforming the [business to customer] operators.
Translating that: Luxury and high-end gaming and experiential businesses did well last year. Those catering to the lower economic quartiles… not so much. No real surprise there.
Also, gaming REITs in general had a tough year in 2025. Again, that’s not a huge surprise. As I shared in a recent interview, 2025 was lopsided and messy for most of REIT-dom.
As for what to expect this year, here’s Deutsche Bank again:
Looking ahead into 2026, we anticipate sustained health in the high-end gaming & lodging consumer segment, while we believe the lower-end gaming & lodging consumer begins to stabilize and potentially improve, driven by easy comparisons combined with favorable tax policies and potential domestic stimulus.
JPMorgan Chase (JPM) essentially agreed with that assessment in its December 12 report, writing:
We expect 2026 gaming & lodging fundamentals to be similar to or slightly better than 2025, driven by resilient high-end demand and a stabilizing middle/lower-end customer, which could benefit from OBBBA tax refunds and favorable economic policies ahead of midterm elections. In gaming, our relative preference is for digital, regionals/[Las Vegas] locals, Macau, and then [Las Vegas] Strip; while in lodging, we remain selective, with preference for C-corps with durable/visible growth streams…
Knowing that, I’m looking forward to seeing how one company in particular does this year.
VICI: A Las Vegas King Worth Holding
VICI Properties (VICI) is a net-lease REIT that focuses on “experiential” properties with “industry-leading, growth-minded operators.”
It came into existence after Caesar’s Entertainment (CZR) emerged from bankruptcy in October 2017. Part of the casino company’s comeback plan involved spinning off its properties into a REIT in a sales-leaseback arrangement.
That made it VICI’s one and only tenant for a little while. Though it didn’t take long for the REIT to start gobbling up more gaming properties, adding new customers like:
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Harrah’s
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Penn Entertainment
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Hard Rock
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JACK
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Century Casinos
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Venetian Resort
In 2021, VICI outright doubled its gaming exposure with the $17.2 billion acquisition of MGM Growth Properties. This gave it a virtual monopoly on casino-focused real estate in Las Vegas.
Then, much more recently, it announced the proposed $1.6 billion acquisition of seven properties from Golden Entertainment. If it goes through as expected, the deal will further diversify VICI’s Las Vegas real estate ownership.
VICI also owns the sports and entertainment-centered Chelsea Piers in New York City. And it provides additional space for other non-gaming tenants such as:
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38 bowling alleys leased to Lucky Strike
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Water park resorts-operator Great Wolf Lodge
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Canyon Ranch wellness resorts
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Homefield KC sports centers
While I definitely appreciate that additional diversity, let’s be clear: The majority of VICI’s revenue still comes from casinos located in Las Vegas.
As you can see below, it owns 10 trophy assets along the Strip, comprising over 660 acres of underlying land. Then there’s its 26 acres of undeveloped land strategically located adjacent to The LINQ and behind Planet Hollywood… as well as seven acres of Strip frontage property at Caesars Palace.
Source: VICI Investor Presentation
In short, it’s safe to say that VICI has outsized exposure to Las Vegas. So, if anyone’s going to benefit from increased high-end exposure there, it’s this impressive REIT.
The Over and Under for VICI
Admittedly, its original tenant, Caesar’s, has seen a 28% decrease in earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (“EBITDAR”) since 2021. Combined with a 13% rent increase in that time period, some investors have become overly concerned about VICI’s short- and mid-term potential.
For me though, I see the resulting share price pullback as a discounted opportunity to buy into a solid company.
It’s true that VICI currently owns 18 Caesar’s properties that generate around $1.22 billion in annual rent, or 39% of VICI’s annualized rent. And, yes, there is a possibility of the REIT restructuring its tenant’s lease to offer it more breathing room.
But just a small one.
Caesar’s remains a relatively healthy corporation. It boasted robust free cash flow of around $400 million last year and held over 65 million rewards members.
In terms of VICI itself, it now boasts a 6.4% dividend yield. That’s well-covered with an adjusted funds from operations (“AFFO”) per share payout ratio of around 74%. Meanwhile, its price-to-AFFO multiple is 11.9 times, well below the normal multiple of 15.7 times.
Better still, as interest rates continue to decline as expected, VICI’s cost of capital will fall, allowing it to generate wider investment spreads – just one more reason why I’m confident VICI holds a good hand going into 2026.
I plan to visit Las Vegas in a few days to research VICI properties further. While there, I’ll also be gathering information for an exclusive “boots on the ground” report for Wide Moat Research members.
You see, I’ve uncovered three other unique opportunities that should benefit from increased interest in Nevada… which could lead to significant wealth creation.
Regards,
Brad Thomas
Editor, Wide Moat Daily
Disclosure: VICI is the largest holding in the newly-listed Truth Social American Red State Fund (TSRS), which seeks to provide investment results that correspond to the price and yield performance of the MarkvetVector – iREIT® Red State Index, an index I helped create.
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