Nadine
February 8, 2025

The Kingpins of the Las Vegas Casino Strip

The Las Vegas Strip has undergone a dramatic transformation from a remote desert highway into one of America’s most iconic districts – a neon-lit canyon of glamour, excess, and capitalist ambition. Its decades-long journey reflects the shifting tides of power and vision that have defined Sin City.

The Strip’s humble origins date to the 1930s as a vital road linking LA to Las Vegas through empty Nevada desert. Back then, Vegas was a sleepy railroad town. Visitors were scarce beyond Hoover Dam construction workers who lodged in modest motels flanking the two-lane road.

However, some visionaries saw potential in the desert outpost. For example, in 1941, the El Rancho Vegas resort opened on the Strip, pioneering the casino-hotel model. Its success inspired more developers, even catching the eye of notorious East Coast mobster Bugsy Siegel. In 1946, he built the extravagant Flamingo Hotel, cementing organized crime’s presence on the Strip and kicking off an era of rapid development.

Over the ensuing decades, the Strip exploded with lavish properties like the Sands, Dunes, and Stardust coming up. By the 1960s, complexes like Caesars Palace had transformed the Strip into an entertainment epicenter synonymous with indulgence. The 1970s saw boundary-pushing projects like the original MGM Grand.

All this time, the Strip remained a diverse patchwork of independent hotel-casinos. But today, this landscape looks very different. Today, the Strip is dominated by just two gaming giants – MGM Resorts and Caesars Entertainment – which combined control over half the major resorts.

This consolidation of power is a new phenomenon. So how did we get here? How did just a handful of brands come to rule Sin City’s once fiercely independent Strip? This article delves into the key power players ruling today’s Las Vegas casinos and how they clawed their way to the top. Let’s get right into it!

The Rise of the Vegas Titans

The modern battle for the Strip began in 1989. After over a decade of stagnation, the opening of Steve Wynn’s opulent Mirage Resort kicked off a casino building boom in Las Vegas. Competitors rushed to construct ever more ostentatious properties along the Strip. MGM Grand, Luxor, Excalibur, Paris, New York-New York and other eye-catching megaresorts popped up in quick succession.

Behind the scenes, casino operators scrambled to expand their footprints. The Mirage’s success inspired a wave of mergers and acquisitions that steadily consolidated power. By the early 2000s, four major companies controlled the Strip landscape:

  • MGM Mirage owned the MGM Grand, The Mirage, and Treasure Island
  • Caesars Entertainment owned the Caesars Palace, Bally’s, and Paris Las Vegas
  • Harrah’s Entertainment owned Harrah’s and later Imperial Palace
  • Mandalay Resort Group owned Mandalay Bay, Luxor, Excalibur and Circus Circus

However, come 2005, two seismic deals shrank that number to two. MGM acquired Mandalay in a deal worth $7.9 billion, bringing the Luxor, Excalibur and Mandalay Bay under its umbrella. Meanwhile, Harrah’s purchased Caesars Entertainment for $9.4 billion, including Caesars Palace. Almost overnight, MGM and Harrah’s (later renamed back to Caesars) became the undisputed kingpins of Las Vegas casinos.

Today these two giants lord over the Strip. MGM Resorts owns iconic properties like Bellagio, MGM Grand, The Mirage, New York New York and Park MGM. On the other hand, Caesars Entertainment has under its wings Caesars Palace, Harrah’s, Paris, Planet Hollywood and other famous resorts. Together they control around 17 of the 27 major hotel-casinos on the Strip.

Challengers remain, however. For example, Phil Ruffin’s TI west of Caesars Palace provides some tough competition, while there’s the Venetian and Palazzo complex which operate independently as well. But none come close to matching the power of the “Big Two.” For better or worse, MGM and Caesars together form the public face of Las Vegas.

The Fall and Rise of Caesars

Caesars Entertainment’s path to becoming one of the Strip’s titans was particularly rocky. The company seemed an unstoppable force in the early 2000s following its mergers with Harrah’s. However, the massive 2005 leveraged buyout by Apollo Global Management and TPG Capital soon saddled it with crippling debt.

As the 2008 financial crisis hit, Caesars struggled to manage its over $20 billion leverage. By 2015 it was forced to declare bankruptcy. The subsequent restructuring slashed Caesars’ Strip presence, with creditor ownership rising to over 60%. But it also birthed a new force in Las Vegas real estate: VICI Properties.

Part of Caesars’ bankruptcy settlement involved splitting its property assets from gaming operations. As a real estate investment trust (REIT), VICI could own Caesars resorts tax-free and lease them back to the operating entity. This allowed Caesars to offload debt while benefiting from rent payments.

Initially owning just former Caesars properties like Harrah’s and Planet Hollywood, VICI expanded by acquiring competitor real estate. In 2022, it bought fellow REIT MGM Growth Properties, assuming ownership of MGM Grand and other non-Caesars casinos.

VICI now owns more than 10 resorts on the Strip assets including Caesars Palace, The Mirage, Park MGM and the Las Vegas Festival Grounds. Though banned from gaming operations, its massive property portfolio makes the company such a powerful player in the battle for Las Vegas real estate.

MGM Follows the REIT Route

Seeing the advantages of removing real estate from gaming, MGM Resorts followed Caesars’ lead in 2016. MGM Growth Properties was spun off to hold iconic Strip properties like Bellagio, Mandalay Bay, and The Mirage. Leasing them back brought MGM valuable rental income while unburdening itself from billions in leverage.

The REIT strategy bore other benefits too. By selling its properties, MGM gained cash to reinvest in expansion and acquisitions. In recent years it purchased the Cosmopolitan and CityCenter complex on the Strip, along with prominent U.S. regional casinos like Empire City in New York.

The creation of MGM Growth Properties also positioned MGM’s real estate for acquisition. When VICI bought MGM’s REIT in 2022, it gained a treasure chest of prime Vegas hotels. MGM in turn saw over $4.4 billion freed to deploy in new gaming ventures. The global resort company likely remains eager for future Strip acquisitions.

The Changing Face of Las Vegas Ownership

The rise of real estate investment trusts (REITs) has fundamentally altered the ownership landscape in Las Vegas. By spinning property assets into separate companies like VICI and MGM Growth Properties, casino operators gained numerous advantages:

  • REITs provide tax benefits, allowing property owners to lease hotels back to casinos at lower effective rates.
  • Separating real estate from operations removes leverage from gaming companies’ books thereby improving debt profiles.
  • Cashing out property assets helps to generate funds for new investments and growth opportunities.
  • REITs can acquire competitors’ real estate and consolidate ownership under one roof.

For casino operators, these benefits come at the cost of no longer owning their iconic hotels. On the other hand, for REITs, gaming regulations prohibit direct involvement in casino operations. This new structure divides the Strip’s power between property kingpins like VICI and casino brand giants like MGM and Caesars.

It also opens the playing field to commercial real estate investors. For example, groups like Blackstone and San Manuel Band of Mission Indians are snapping up Strip hotels purely for their property potential. The battle, therefore, is expanding beyond gaming corporations to include private equity firms, REITs, and investment funds drawn to Vegas real estate.

However, some foresee the REIT structure as merely a temporary separation between ownership and operations. VICI in particular has steadily consolidated control of the Strip’s most valuable buildings and land. Its CEO recently acknowledged ambitions to eventually operate casinos should regulations change.

For now, the REITs remain formally separated from gaming. But down the road, the kingpins of Las Vegas real estate could make a play at uniting property and operations under the same roof once again.

The Other Players Circling for a Piece

While MGM and Caesars may dominate center Strip, other investors continue battling for a slice of the action. Here are a few notable ones making huge moves:

Phil Ruffin

A successful businessman, Phil has acquired and revived distressed properties like Circus Circus and also owns half of Trump International Hotel. Ruffin remains a small but opportunistic player worth watching.

San Manuel Band of Mission Indians

This wealthy California tribe recently purchased The Palms and Rio Hotel & Casino. They are leveraging their tribal gaming experience to enter the competitive Vegas market.

Blackstone

The private equity group has gone on a Vegas buying spree, acquiring The Cosmopolitan, Bellagio, Bally’s and more. Their deep pockets make them a real threat for future deals.

These investors, along with VICI Properties, reflect how the “battle for Vegas” now includes property owners and real estate players beyond gaming companies. The kingdom MGM and Caesars once ruled alone clearly has attracted new power brokers into the space.

The Strip of the Future

MGM and Caesars will likely continue holding their kingpin status for the foreseeable future. Their rewards programs, volumes of hotel rooms, and Strip geography give them prime advantages with visitors. Consolidation has also led to cost savings and operational efficiencies that benefit their bottom lines.

However, as with any industry, staying on top requires constant adaptation. A case in point for example is that younger generations don’t gamble as much as their elders. Today, Las Vegas is responding by emphasizing clubs, pools, restaurants, and experiences catering beyond the casino floor. For this and more reasons, MGM and Caesars will need to evolve to keep drawing new visitors into their resorts.

There are also signs the real estate divorce between gaming and property ownership could one day lead to divorce between owners and operators. VICI Properties is legally prohibited from running casinos. However, with its growing presence on the Strip, some speculate it could lobby to change REIT rules banning gaming involvement.

If allowed to operate casinos, VICI would become a fearsome competitor given its footprint on the Strip. For now, MGM and Caesars’ control looks solid. But as past decades have shown, the battle for Las Vegas never stays quiet for long. The ruthless competition will likely churn the Strip’s ownership for decades to come.

An Overview of Key Players in the Battle for Vegas

  • MGM Resorts International
    • Current Properties: Bellagio, MGM Grand, The Mirage, Mandalay Bay, New York-New York, Park MGM, Luxor, Excalibur.
    • Previously Owned: Treasure Island, The Cosmopolitan, Monte Carlo/Park MGM, Circus Circus.
    • Future Projects: New megaresort The Fontainebleau planned for northern Strip
    • Company History: Formed from mergers including MGM Grand & Mandalay Resort Group in 2005
    • CEO: William J. (Bill) Hornbuckle IV since 2020, veteran executive with decades at MGM
  • Caesars Entertainment
    • Current Properties: Caesars Palace, Harrah’s, Paris, Planet Hollywood, The Cromwell, The Linq
    • Previously Owned: Rio, Imperial Palace
    • Recent Moves: Merged with Eldorado Resorts in 2020, rebranded Bally’s to Horseshoe Las Vegas
    • Company History: Grew rapidly in 1990s/2000s before 2008 leveraged buyout crippled finances
    • CEO: Tom Reeg since 2020 merger with Eldorado, veteran casino executive
  • VICI Properties
    • Current Properties: Caesars Palace, The Mirage, MGM Grand, Park MGM, The Venetian, more than 50 Strip assets
    • Recent Moves: Acquired competitor REIT MGM Growth Properties for $17.2 billion in 2022
    • Company History: Spun off from Caesars Entertainment during its bankruptcy in 2017
    • CEO: Edward Pitoniak since VICI’s inception, veteran REIT executive
  • Blackstone
    • Current Vegas Properties: The Cosmopolitan, Bellagio, CityCenter
    • Company History: Global private equity group, acquired its first Vegas asset with Cosmo purchase in 2014
    • CEO: Stephen Schwarzman, co-founded Blackstone in 1985, a net worth of over $29.7 billion
  • Phil Ruffin
    • Current Properties: Circus Circus, TI (formerly Treasure Island)
    • Company History: Self-made businessman who acquired first Vegas property in 1997
    • CEO: Phil Ruffin runs his privately held company, with no outside investors
  • San Manuel Band of Mission Indians
    • Current Properties: The Palms, Rio Las Vegas
    • Company History: Prominent California tribe expanding off-reservation land
    • Leadership: Chairwoman Lynn Valbuena guiding the tribe’s gaming ambitions

We Can’t Forget The Little-Known Players

Behind MGM, Caesars and the deep-pocketed investors above lie an ecosystem of smaller independent casinos still retaining influence along the Strip. Here a few notable ones you might have heard of:

  • Wynn Resorts: Upper-end niche with Encore and Wynn properties at the north end of the Strip.
  • Las Vegas Sands: Focused on conventions after selling The Venetian and The Palazzo resorts to VICI and Apollo in 2022
  • Station Casinos: Locals-focused casinos like Palms Springs off the Strip now owned by Red Rock Resorts

Additionally, casino magnate Steve Wynn also retains a lot of influence as the visionary developer behind The Mirage and Bellagio, despite exiting these companies.

The Ever-Changing Strip

The Las Vegas Strip today would be nearly unrecognizable to visitors from just 20 years ago. The quick rise of REITs like VICI has particularly fractured ownership of the Strip’s crown jewels.

Yet while the players keep changing, the allure of Las Vegas remains intact overall. MGM and Caesars might have ruled the Strip’s casinos for over a decade, but now they must actively fight to maintain their place. Changing customer tastes, new regulations, competition and technology are all shaping the battlefield and the next wave of consolidation or fragmentation likely lurks just over the horizon.

The true winners in this never-ending battle are the millions of visitors who come to Las Vegas to play under the neon lights each year. The ruthlessly competitive casino industry must continually reinvent itself to attract and wow growing legions of gamblers and tourists who visit every year.

For anyone seeking thrills and making bets, Las Vegas remains undefeated and will likely remain this way for many years to come.