KVIG Informative

Las Vegas Strip casinos increasingly split into two separate businesses: one company owns the ground and buildings, another runs the gambling on top of it. That split did not start with Wall Street real estate trusts. It started when the man who built Caesars Palace sold it to a restaurant company three years after the doors opened.

Jay Sarno and Stanley Mallin opened the Atlanta Cabana Hotel in 1958 with financial help from Jimmy Hoffa, Allen Dorfman and Doris Day, according to biographical records UNLV Libraries Special Collections maintains as part of its Jewish Heritage Project. The partners built two more Cabana hotels, in Palo Alto, California, and Dallas, before moving into Las Vegas, according to the same UNLV records.

Sarno designed Caesars Palace as a Roman-themed resort, the first fully themed property on the Las Vegas Strip, according to UNLV Special Collections’ biographical record on Sarno. The casino opened in 1966 after $24 million in construction costs, according to UNLV’s biographical record on Mallin.

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Sarno and Mallin sold Caesars Palace in 1969 for $60 million to Lum’s, a Florida-based restaurant company, according to UNLV’s biographical record on Mallin. Lum’s subsequently renamed itself Caesars World, the same record states.

The sale ended Sarno and Mallin’s ownership of the casino they built. It also marked a shift away from individual ownership, financed in part through Teamster-linked backers, toward the kind of institutional ownership that now defines much of the Las Vegas Strip.

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VICI Properties, a real estate investment trust, now owns the land and buildings at Caesars Palace Las Vegas, one of more than 100 properties in its portfolio leased to operators, including Caesars Entertainment, under long-term agreements, according to VICI Properties’ own investor relations materials.

Caesars Palace has not been owned and operated by a single company since Lum’s bought it from its founders. Nearly six decades after Sarno’s Roman columns went up, the building still works the way that 1969 sale first set it up to: one company owns the ground, another runs the casino standing on it, and neither one has to be the person who dreamed it into existence.