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CuracaoLVS representatives confirm discussions
Reports that Las Vegas Sands Corporation (LVS) is looking into divesting $6bn worth of Sin City assets were confirmed Monday after company representatives said it was in “very early discussions”.
The assertion backs a Bloomberg News report that the American casino and resort company is exploring the sale of its flagship Las Vegas properties. LVS spokespersons did, however, add that “nothing has been finalized”.
LVS operates the Palazzo, The Venetian, and the multibillion-dollar integrated casino resort Sands Expo and Convention Center (SECC) on the Las Vegas Strip. It is also a co-investor with Madison Square Garden in the $1.66bn MSG Sphere project slated to open in 2023.
Until people feel safe, they’re not coming to Vegas”
Sin City properties are battling to attract big-spending visitors because of the COVID-19 travel fallout. LVS president and COO Robert Goldstein summed the situation up in a Q3 conference call last week, saying: “Until people feel safe, they’re not coming to Vegas.”
Looking East
In an earnings call on October 21, LVS reported an 82% net revenue drop year-on-year for Q3. Net revenue was $586m, a dramatic slump from the $3.3bn generated for the same period in 2019.
Conversely, LVS’s assets in Macau and Singapore each made more third-quarter revenue than their Sin City counterparts. Its Singapore operation reported earnings of $281m, while Macau properties brought in combined revenue of $167m. The Las Vegas properties brought in just $152m for Q3, according to the LVS Q3 report.
potential move of the entire LVS business out of the US would not be entirely surprising
In light of strong performance from its Asian assets, and a $13.82bn total outstanding debt as of June 30 (excluding finance leases), a potential move of the entire LVS business out of the US would not be entirely surprising.
In the earnings call, chairman and CEO Sheldon Adelson said Macau has the potential to become “one of the greatest business and leisure tourism destinations in the world.” He added that LVS would welcome the chance to “invest billions of digital investment dollars” in the world’s gambling capital.
Severing ties with the US?
Reacting to the news of the sale talks, founding partner of the Strategy Organization and gaming consultant Josh Swissman questioned LVS’s exploration into severing its historical links to Las Vegas. He found it “interesting that they would move away from all of that after all the time and energy that they’ve spent building and growing (their flagship properties) over the years.”
Nehme E. Abouzeid, the president and founder of Launch Vegas LLC, observed that while LVS operates resorts in high-end destinations, it lacks “the network effects, loyalty program reach, or market access to U.S. online gaming and legalized sports betting that is fashionable right now.”
Abouzeid also pointed out that Adelson had previously toyed with moving his company headquarters to Asia but always “walked it back”.
Bracing employees
The Las Vegas Review-Journal reported that it is in possession of an email sent by George Markantonis – president and COO of the Palazzo, The Venetian, and the SECC – to LVS employees on Monday that addresses the possible sale of Vegas assets.
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Markantonis acknowledged that, while the news of the sale might come as a surprise to LVS staff, it was too early to make assumptions. He added that it was “a complex process and nothing may come of it.”
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