One of the world’s biggest gambling companies is facing a major lawsuit from a former business partner. According to multiple reports, Las Vegas Sands is being sued by Marshall Hao, and his company Asian American Entertainment Corp (AAEC). It’s disappointing news for the Sands, which has invested billions in operations in Macau.
Today, we’re going to look at why Las Vegas Sands is facing this lawsuit. We’re also going to look at some of this company’s recent expansion plans in Macau. Let’s get started!
Las Vegas Sands is Being Sued for $12 Billion
This company is known as one of the most successful casino operators in the world. Las Vegas Sands owns many gaming properties around the world, including several in Macau including the Plaza Macao, Sands Macao, and the Venetian Macao. According to Marshall Hao, profits earned through the Venetian Macao are not being paid to him.
Hao claims that he came up with the idea for this hotel-casino. Hao is also claiming that he’s owed 70% of the profits earned through Las Vegas Sands’ operations in Macau dating back to 2001. Now, his company is suing LVS for an astounding $12 billion.
Back in 2001, the AAEC and Las Vegas Sands filed a joint casino application in Macau. Marshall Hao is alleging that he helped Las Vegas Sands break into the Macau market. According to the lawsuit, he’s also the main reason why Las Vegas Sands is the world’s largest casino company.
This isn’t the first time that the Taiwanese businessman has tried to sue Las Vegas Sands. In 2007, he filed a lawsuit against the company, yet it was dismissed just three years later. Now, Hao is raising the stakes with a massive $12 billion lawsuit.
Sands China, a subsidiary of Las Vegas Sands that runs the company’s Macau operations, commented on the recent lawsuit, stating that it is “unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any.” Sands China also claims that it’s ready to “defend this matter vigorously.”
Las Vegas Sands Continues to Invest In Macau
As we’ve already mentioned, Las Vegas Sands owns and operates several casinos in Macau. This city is thought of as the world’s top gambling hub and LVS continues to invest in expansion plans here. This company is investing more than $2 billion in Macau over the next two years.
LVS is working to expand and improve several of its properties here. Most of the $2 billion is going to rebrand the Sands Cotai Central complex to the Londoner, a UK-themed casino-resort. $1.35 billion is going towards this massive project.
Another $400 million is being used to construct the St. Regis Tower Suites Macau. More than $450 million is going towards the construction of the Four Seasons Tower Suites Macau. Both of these new properties are expected to be completed by 2020’s first quarter.
It’s unclear if this lawsuit will affect this company’s plans in Macau. Las Vegas Sands has been sued several times in the past, including earlier this year with a lawsuit from Richard Suen. LVS and Suen settled out of court for an undisclosed amount of money.
Macau’s Revenue Continues to Fluctuate
We’ve covered Macau’s revenue several times over the past few months. This small territory has experienced a massive revenue dip in 2019 due to trade disputes between the US and China and increased competition in nearby countries. In June, I briefly discussed the risk that Las Vegas Sands is taking by investing so much money here.
There were some analysts that believed Macau lawmakers would choose not to renew gambling licensed for US-based companies. The US is blamed for a major decrease in VIP gamblers visiting Macau. Pansy Ho, one of the most influential figures in Macau, now claims that US companies operating in Macau will have their licenses renewed in 2022.
Gambling revenue continues to fluctuate here. For most of the year, casinos in Macau have seen their earnings drop. In June, revenue here rose slightly, yet it’s unclear whether or not this trend will continue for the rest of 2019.
It’s clear that companies are taking risks by investing here. Las Vegas Sands is being sued now, and if even a portion of the $12 billion lawsuit is paid, it will be a major blow to this casino operator. Make sure to stay tuned for more updates on this situation over the next few months!