Caesars Entertainment Corporation recently announced the sale of one of its oldest properties, Harrah’s Las Vegas to VICI Properties for $1.14 billion in cash. [Caesars was formerly known as Harrah’s Entertainment.] This not a normal billion-dollar sale, though, but is instead a “leaseback” sale. That is, VICI will turn around and lease Harrah’s Las Vegas back to Caesars, allowing Caesars to continue operating the property.

As part of the deal, Caesars will also take ownership of an 18.4-acre plot of land adjacent to Harrah’s on which it plans to build a 300,000-square-foot convention center. Caesars boasts that the convention center will feature “the largest column-free ballroom in the United States and to be outfitted with state-of-the-art technology.”

By maintaining control of Harrah’s Las Vegas even though it will be under different ownership, Caesar’s keeps intact its group of casinos in the middle of the Las Vegas Strip. On the west side of the street is the famous Caesars Palace, while across the street are Harrah’s, The Linq, Flamingo, and Cromwell. On the next block south are Bally’s, Paris, and Planet Hollywood. And while not on the Strip proper, let’s not forget the Rio, just a bit west of Caesars, which hosts the World Series of Poker.

The convention center will certainly enlarge the Caesars footprint.

The reason Caesars made this deal with VICI was to fund the purchase of Centaur Holdings, LLC, which was announced November 16th. That transaction will put Hoosier Park Racing and Casino in Anderson, Indiana and the Indiana Grand Racing and Casino in Shelbyville, Indiana, plus three off-track betting locations, into the Caesars portfolio. Caesars already owns the Horseshoe Hammond and Horseshoe Southern Indiana casinos.

The deal for Centaur is for $1.7 billion in cash and therefore will be primarily funded by the Harrah’s sale.

“The addition of Centaur is the first example of our post-emergence, inorganic growth strategy,” said said Caesars Entertainment CEO Mark Frissora. “The acquisition of Centaur represents an excellent opportunity to enter into a growing region. We anticipate that the deployment of Total Rewards will bring substantial benefits to current Centaur customers and the implementation of our centralized supply chain and efficient operating model will drive synergies.”

Interestingly, to me, at least), companies are only allowed to own two riverboat casinos in Indiana and this will take Caesars’ total to four. Caesars skirted this rule, though, because the two Centaur properties are race tracks and casinos.

And so Caesars makes room for a couple new casinos by kind of, sort of, shedding one.

The lease Harrah’s is signing with VICI for Harrah’s Las Vegas will be for 15-years with an initial annual rent of $87.4 million. The rent “will increase contractually in subsequent years,” though the press release issued by Caesars Entertainment did not give any further details as to what those increases will be. Caesars can also extend the lease in five-year increments for up to twenty years.

There’s more. When the convention center has been built, Caesars can actually make VICI buy the building and, like with Harrah’s, lease it right back to Caesars. If Caesars doesn’t opt to do this, VICI can do it itself, buying the convention center and leasing it back to Caesars.

There are several potential benefits for the seller/lessee, but in this case, it is rather obvious: Caesars received over a billion dollars it needs to fund the Centaur purchase. It is a more reliable way to get a chunk of money that large than it may have been finding lenders or other investors. Caesars probably got the full value for Harrah’s in this deal, as well.

In the long run, Caesars is going to pay more to rent Harrah’s than it is receiving from the sale, but that’s essentially like paying interest on a loan. And in the meantime, it still gets to operate the property and make money from it.

For VICI, it is getting a solid return on investment and knows it already has a stable, long-term tenant. Basically, it is a safe investment for VICI. It knows Caesars is going to stay in the property and clearly Caesars understands how to operate a casino.