Sands intends to leave Las Vegas.
U.S. casino giant Las Vegas Sands is reportedly planning to withdraw from its operations in Las Vegas, possibly selling its properties there for about $6 billion. Company founder Sheldon Adelson, 87, is said to be focusing more on Asian markets like Macau and Singapore, where business has recently been severely impacted by the COVID-19 pandemic.
Potential Last Chapter for U.S. Business
Las Vegas Sands, a world-renowned operator in the gaming and entertainment sector, might be bidding farewell to its presence in the U.S. for now. The company, led by Adelson, a billionaire worth almost $30 billion, is rumored to be considering the sale of its casinos in Las Vegas. The list of properties up for sale includes: the Venetian Resort, the Palazzo, and the Sands Expo and Convention Center series, all connected along the iconic Las Vegas Strip.
The casinos in Las Vegas are estimated to be sold for a staggering $6 billion, though representatives of the company have not confirmed any deals or negotiations. If the rumors are true, this could signal the end of Sands' involvement in the U.S. gaming industry.
As the news spread, Sands' shares increased by 12%, reflecting the potential for further expansion in Asia.
Is It a Sound Move?
Experts are asking whether such a move makes sense, considering the ongoing pandemic. In Las Vegas, the casinos have been shut down temporarily, contributing to uncertainty. However, Sheldon Adelson sees potential for growth in Asia. He believes that the Asian markets, particularly Macau and Singapore, are showing signs of a recovery.
Analyst Ben Chaiken from Credit Suisse also suggests that the sale would be financially beneficial. Assessing the price of $6 billion, he says it represents 12 times earnings before interest, taxes, depreciation, and amortization. Meanwhile, attracting a buyer could prove challenging amid the global health crisis.
Macau and Singapore: Sands' Main Focus
Sands has always generated significant revenue in Macau and Singapore, with 63% of its total revenue coming from the former. This amounted to $13.7 billion in 2020. But due to the pandemic, revenues in both regions were down - Macau by 93% and Singapore was the second leading source with 22%. As of 2019, the company had planned to expand in both regions.
After withdrawing from Japan, the sale of the Las Vegas casinos could fund Sands' Asian ventures, which cost approximately $2.2 billion. The $6 billion could cover the costs of maintaining idle operations in Macau for around 17 months. Macau is the world's largest casino market, with pre-pandemic revenues surpassing $30 billion annually, 6 times more than in Las Vegas.
Sluggish Recovery in Q3
Although Sands expects a gradual recovery in Q3, sales are still down 82% year-on-year. Losses amounted to $731 million. The Marina Bay Sands in Singapore brought in $281 million, a decrease of 35.4% year-on-year. By contrast, Sands' shopping malls generated $83 million, a decline of 52.6%, and hotel rooms in the same period saw a $79 million decrease, indicating an 82.7% year-on-year loss.
The setback to Sands' business in Macau was particularly dramatic; total revenue there fell by 91.9% to $171 million. Bloomberg reports that despite travel restrictions in Macau, Chinese tourists are returning to the region and the casino business should pick up soon. However, the situation remains uncertain.
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Source: www.onlinecasinosdeutschland.com
