Gambling operator Las Vegas Sands Corp. is exploring the the sale of its Las Vegas strip properties in a deal that could fetch $6B for the Sheldon Adelson-led corporation.
Las Vegas Sands is said to be currently working with an adviser to gauge and solicit interest for the Venetian Resort Las Vegas, the Palazzo, and the Sands Expo Convention Center.
According to people privy to the matter, Adelson is eyeing to focus on Asia while temporarily leaving the U.S. gambling market. A representative from Las Vegas Sands confirmed the the discussions but added that they are still in the early stages and nothing has been finalized yet.
Focusing in The Far East
If a sale is consummated, Las Vegas Sands would concentrate its casino operations in Macau and Singapore whose markets are much larger than the United States. While Las Vegas may be the more traditionally popular gambling destination, Macau is the biggest casino market in the world.
The company’s U.S. operations accounted for only 15% of the Sands’ total revenue in 2019. On the other hand, Macau accounted for 63% of the company’s $13.7B revenue last year while Singapore contributed 22% of that amount.
The insignificance of its U.S. market is said to be the main reason why Las Vegas Sands is studying to unload its key Las Vegas Strip properties. That plus the uncertainty of when Las Vegas is going to bounce back, have reportedly convinced Sands to focus in the Far East. Sands is reportedly eyeing an expansion in both Macau and Singapore with the company earmarking $2.2B in spending. A sale of its U.S. properties would fund that plan.
Asia is Bouncing Back Faster
The casino industry, which is dependent on air travel, is one of the hardest hit industries by the COVID-19 pandemic. As of June 30, 2020, the company reported a total outstanding debt of $13.2B excluding finance leases. If the Las Vegas situation doesn’t improve soon, it will lead to more losses for the company.
On the other hand, Macau is bouncing back faster. During an earnings call last week, chairman Sheldon Adelson revealed that the steady recovery of the Asian gambling market helped improve the company’s third quarter figures. Meanwhile, Marina Bay Sands had a profitable third quarter of operations.
Las Vegas Sands was founded by its current chairman, CEO, and majority shareholder Adelson who ranks among the wealthiest people in the world with a net worth of $29.7B. Las Vegas Sands is currently valued at around $37.5B.