Adelson, Las Vegas Sands Explore Sale of Strip Properties
Las Vegas Sands Corp., the world’s largest casino company, is reportedly exploring the sale of its casinos in Las Vegas. The sale would include casino mogul Sheldon Adelson’s Strip operations — two resorts and a large convention hall, according to reports.
Company spokesman Ron Reese told MarketWatch the company is in early discussions and no final decision has been made. A sale would mark Adelson’s exit from the U.S. gambling industry and would leave him to focus on the market in Asia. Las Vegas Sands has a market value of $37.5 billion. Adelson serves as the company’s chairman, chief executive officer and the majority shareholder.
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According to people familiar with the discussions, the sale price for the Venetian and Palazzo casinos and Sands Expo and Convention Center could eclipse $6 billion, reports said. The properties are all connected along the famous Las Vegas Strip. The possible sale was initially reported by Bloomberg News.
A sale would put a greater emphasis on Sands’ casino entities in Macau, including the Venetian Macao, one of the largest casinos in the world, and Singapore, which are two larger markets for Adelson. The U.S. gaming industry accounted for less than 15% of revenue last year for Sands.
In an earnings call last week, Adelson mentioned an improvement in Sands’ operating results in Asia for the third quarter. Marina Bay Sands in Singapore also reported a profitable quarter as operations resumed across the resort throughout the summer.
A sale could lead to other development opportunities for the company, the reports suggest. Sands initially was in competition to build a casino in Japan before executives deemed the terms of the project to be unfavorable. Adelson, who is one of the world’s richest people with a fortune estimated at $29.7 billion, has previously stated interest in building a casino in New York City.
Pandemic Impacting Las Vegas
Before the pandemic, casinos in Macau were responsible for 63% of the company’s $13.7 billion in revenue for 2019. Singapore was second at 22%. Sands is set to expand in both regions, with Macau designated for $2.2 billion.
Similar to other businesses in Las Vegas, Sands’ casinos have been impacted negatively by the coronavirus pandemic. Gov. Steve Sisolak ordered the shutdown of casinos in mid-March in an attempt to slow the spread of the virus. The Venetian and Palazzo towers both reopened on June 4 when the shutdown of casinos was lifted. Some casinos have struggled in their return, while others have yet to reopen, including downtown’s Main Street Station Casino.
As a result of the pandemic, tourism and gaming revenue have taken hits. Overall, visitors to the city are down 55% and casino revenue on the strip is off by 45% through August compared to last year.
About 1.7 million people went through McCarran International Airport in August, a decrease of 61% from the same month in 2019, according to the Las Vegas Sun. Downtown hotel occupancy in August was nearly 40%, down half of what it was at the same time last year. Meanwhile, sports betting revenue was down 9.3% compared to August 2019.
The loss in revenue has had a ripple effect on operations. On Aug. 31, MGM Resorts laid off 18,000 furloughed workers, while the M Resort laid off 328 workers and Wynn Resorts announced it had placed employees on furlough.
Now, one of the city’s well-known magnates appears set to sell his iconic Las Vegas properties.
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