Las Vegas Sands plans to sell Las Vegas properties

Las Vegas Sands is reportedly looking into the sale of its Las Vegas resorts portfolio as these properties are no longer deemed core to the business.   The property is owned by the casino tycoon, Sheldon Adelson, and if the sale pushes through, this will mark Adelson’s exit from the USA’s unstable gambling industry.  

The company owns and operates the Venetian, Palazzo, and Sands Expo Convention Center properties. If all three are sold, Sands may rake in £4.6 / $6 billion.  The sale of its Las Vegas properties would lead to a concentrated effort in its operations in Asia as the company is currently operating properties in Macau and Singapore.

Sands is looking into the sale of its Las Vegas properties due to their revenue performance. Its Las Vegas operations were already a small portion of its total revenue before the pandemic and have had little impact in improving the company’s financials after the first few months after the resumption of the gambling industry. For context,  the company’s Las Vegas properties are the lowest revenue-generating properties compared to Its Macau and Singapore properties which accounted for 63% and 22% of the company’s £10.54 / $13.7 billion revenue in 2019.  

During the company’s earnings call last week, its chief executive officer, and majority shareholder, Sheldon Adelson, revealed that a revenue recovery in Asia has helped the company improve its operating results for Q3 2020, in stark contrast to its USA operations where revenues have plummeted due to a 60% drop in total visitor volume compared to last year’s numbers.  

Sands has confirmed that it is in very early discussions about the possible sale of its Las Vegas properties but nothing is confirmed yet.  The sale of Sands’ Las Vegas properties is justifiable as the pandemic has created a lot of hindrances and uncertainty in the casino and convention business. The proceeds from the sale would enable Sands to invest in expansion projects in Asia.  The operator has plans on spending £1.69 / $2.2 billion on expanding and upgrading its operations in Macau.  It is also set on investing £2.54 / $3.3 billion in its Marina Bay Sands expansion project as per its agreement is Singapore’s government.  The same amount is to be invested by its main competitor, the Genting Group.  These investments would lead to an extension of the two’s duopoly over casino gambling in Singapore to at least 2030.  

Though set on its Macau investments, Sands may face a hurdle in the future.  As it stands, the operator’s Macau subsidiary, Sands China Ltd, is one of the six casino resort licensees in the city. However, this license is set to expire in 2022 and its renewal may be threatened by many unknowns.  One of these unknowns primarily deals with local regulators as they would be the ones to decide to reselect its current concessionaires or opt for new ones.  The latter option would be catastrophic for the City’s current casino operators, which includes Sands, as it plans to concentrate more on its Macau operations.