Walked into a Vegas club last weekend and my direct report from work was already there with his wife. How do I act on Monday.

1am, I'm at the kitchen counter, can't sleep, and Daniel's wife saying "oh god" out loud is on loop in my head. Monday morning we have a 1-on-1. He reports to me. Saturday night, Vegas, off-strip club, my wife and I have a deliberate travel-only policy specifically to avoid this. Thirty minutes in I walk into the upstairs lounge and there's Daniel with Priya. All four of us register the situation in the same second. Quick nod, my wife and I went downstairs, we stayed there, left at 1am, didn't see them again. Flew home Sunday. Now it's Sunday night. I'm in mid-management at a tech company in the Bay Area, three years in the lifestyle, and I do not have a play for Tuesday. Pretend it didn't happen? Address it head-on? Text him Sunday night saying something neutral? Wait for him to address it? The power dynamic is the thing that's eating me. He's the junior one. If he never mentions it I can never mention it either, which means the rest of our working relationship has a permanent quiet thing sitting in the middle of it. And his next performance review is in eight weeks, and any decision I make about him from this point forward I'll be second-guessing my own motives on. Anyone been in this exact spot? What's the protocol when you're the senior person and you stumble on a direct report in the scene?