Las Vegas Strip's Biggest Landlord Acquires Multiple Casinos for $1.16 Billion

Affinity Interactive, which owns various casinos in Las Vegas and Primm, is reportedly seeking a debt restructuring deal with the investment bank Moelis, according to a report from Casino.org News. The company is under pressure from creditors, some of whom have enlisted the law firm Akin Gump Strauss Hauer & Feld, known for its expertise in Chapter 11 bankruptcy cases.

This move follows a significant drop in Affinity's credit rating by S&P Global Ratings, which downgraded the company from B- to CCC+ due to unsustainable debt ratios. By the end of 2023, Affinity's debt to EBITDA ratio was 7.8x, but it surged to 11.7x by the end of the third quarter of 2024, leading to concerns among bondholders.

The report indicates that Affinity's capital structure is viewed as unsustainable, with expectations that leverage will remain above 8x through 2026. Earlier in March 2023, Affinity attempted to raise cash by selling its Rail City Casino in Sparks, Nevada, but this transaction further impacted their EBITDA.

In light of these financial struggles, Affinity is also looking to conduct a potential fire sale of assets, including the Silver Sevens Hotel & Casino in Las Vegas, as well as three Midwest regional casinos.

These properties are being marketed with the help of CBRE and Goldman Sachs, although no transactions have been finalized yet. If these sales go through, Affinity's remaining portfolio would consist mainly of its properties in Primm, including Buffalo Bills Casino and the Primm Valley Resort & Casino.

In a separate but related development, VICI Properties Inc. has made a significant move in the Las Vegas market by acquiring multiple casinos, including the STRAT and Arizona Charlie's, for 1.16 billion dollars.

This acquisition underscores the ongoing evolution and competitive dynamics of the Las Vegas Strip, reflecting both challenges and opportunities within the casino industry. As this landscape continues to change, the impact on tourism and local economies in Las Vegas will be closely monitored as more developments unfold.