Las Vegas Sands moved Wednesday to transfer its interests in its Strip properties, saying the sale provides “an enormous opportunity” to redeploy capital and get “outsized returns” in the U.S. and Asia.
The Nevada Gaming Control Board recommended the Nevada Gaming Commission sign off on that transfer later this month.
In March 2021, two months after the death of Chairman and CEO Sheldon Adelson, LVS entered into agreements to sell its Sands Venetian and Palazzo resorts and Sands Expo and Convention Center for $6.25 billion to Apollo Global Management Inc. and Vici Properties Inc.
Current LVS Chairman and CEO Robert Goldstein said it was an attractive price and he remains bullish on Las Vegas.
“We’re very fond of Las Vegas,” Goldstein said. “I’ve been here since 1994 and have nothing but wonderful memories and thoughts about this city and how we’ve been treated. We intend to remain here. We bought a building on Durango (Drive), so the company will have about 300 employees and remain in Las Vegas forever.”
Goldstein said the majority of LVS income comes from Macau and Singapore, markets that have been disrupted by the pandemic.
“We now enter year three of what’s been a horrific 24 months,” Goldstein said. “I was in Beijing in 2020 when the ambassador said there may be this small virus in Wuhan that may impact Macau for a week or two. That was the first we heard of it and obviously, it’s been disruptive to both Macau and Singapore. As we enter Chinese New Year this week, we’re still running very small numbers in both those markets. It did impact our thinking.”
Goldstein said they’re grateful for the company’s opportunities in Las Vegas and LVS has done well, but there are better investments in Asia and “large-scale developments in the U.S.”
The company has been seeking gaming opportunities in New York, Florida, and Texas.
“Never be confused about our great thoughts about Las Vegas and about this market,” Goldstein said. “We still believe in the market. No one ever felt its collapse wouldn’t return. That’s the sentiment behind the sale.”
Board member Philip Katsaros said that though the initial consensus from the investment community was that it would take a while to return to normalcy in Las Vegas, the Strip and Nevada had a record year for gaming revenues in 2021.
Goldstein said the convention business, however, remains soft and that was evident with the Consumer Electronics Show in January.
“CES was disappointing, but I think we’re turning the pages in the U.S.,” Goldstein said. “I think that will resolve itself in 2022. I’m confident in every segment. The gaming segment showed very well, but I wouldn’t be confused about what happened. I believe the large-box group business will return in 2022. I know people think it’s forever, but I don’t believe that. It’s not forever. Life will return and it will get better. Banquets will surge again. People will go back to living a normal life. I think people have short memories of how quickly things change. You see evidence of that in Europe.”
Goldstein said while the group business has struggled, that won’t be a long-term issue for Las Vegas.
“A wonderful problem for the new owners is what is the best segment to be in,” Goldstein said. “Is it the gaming segment versus the group segment? It’s a wonderful opportunity to grow both to maximize the earnings valuations of the Venetian and Palazzo.”
Goldstein said it was exciting to see record fourth-quarter numbers in Las Vegas in gaming. That presents an opportunity for the new owners to maximize earnings potential. “This is a great market and it will continue to be a great market for many years to come.”
Board members thanked LVS for paying its employees during the pandemic shutdown and for their commitment to the community.
