Las Vegas Sands Corp. Abandons its Cash Cow to Foray into the Digital Gambling Market!
Las Vegas Sands Corp., which has a glamorous history in Las Vegas, has decided to pull out of the city to focus on the digital gambling market in China and Asia. The company sold all its assets and operations in Las Vegas for a total of US$ 6.25 billion. Vici Properties, a real estate investment trust company which specializes in investments in casino properties, acquired the company’s assets, while Apollo Global Management purchased the company’s operations in Las Vegas. This move signals the group’s intention to completely withdraw from the US gambling market. Macao and Singapore will represent the main center of the company’s gambling operations in the future.
The casino capital Las Vegas was deeply impacted by the COVID-19 pandemic last year. Revenues plummeted due to a dramatic decrease in visitor and business client numbers. Las Vegas Sands Corp. therefore initiated the planning for disposal of all its assets in Las Vegas last year.
In March of this year, the company agreed to the purchase of the Venetian Hotel, Palazzo (a luxury hotel and casino resort), and the Sands Expo and Convention Center in Las Vegas by Vici Properties for a total of US$ 4 billion. Apollo Global Management acquired the company’s casino operations in Las Vegas for US$ 22.5 billion. Half of the total amount was financed by Las Vegas Sands Corp.
Sheldon Adelson, the former CEO and founder of Las Vegas Sands, participated in the sale negotiations and expressed his hope that the company would focus on the Asian market in a financial report related meeting which was attended by the top executives of the company. Unfortunately, Mr. Adelson passed away in January of this year.
His passing and the sale of all the company’s assets in Las Vegas does not signal the end of an era. Despite the fact that the company’s HQ is located in Nevada, the group will shift its attention to the “Super Gambling States” New York and Texas.
Las Vegas Sands points out that Macao represents a growth market for the company. The group has expressed its willingness to invest in the renovation of existing facilities or the development of a new property on available or newly released land. The company is currently unable to determine whether the Macao government will permit more casinos, but it anticipates the launch of a rising number of non-gambling projects. Since Mr. Adelson was strongly opposed to online gambling, the group has started to explore opportunities in the sports betting and other digital gambling markets only recently.
Source : CNBC