Does the real estate securities sector’s budding embrace of highly specialized equity REITs suggest tax-exempt retirement funds and other institutions will soon be placing multimillion-dollar bets on publicly traded casino companies?

While the answer appears to be at least a tentative “affirmative,” the motivations underlying efforts by three large gaming companies to establish new REITs illustrate both encouraging and dubious drivers of niche REIT formations.

On the positive side, liberal IRS interpretations have broadened the definition of business assets qualifying as “real property” eligible for the tax-advantaged REIT corporate structure. Along with other benefits, including generally enhanced access to capital markets, the structure’s avoidance of federal income taxes at the corporate level continues to attract institutional equity amid a solidly performing domestic REIT universe.

Accordingly, companies competing in quite a collection of esoter