With billions in the balance, lawsuit against Las Vegas Sands in Macau may finally reach day of reckoning

With billions in the balance, lawsuit against Las Vegas Sands in Macau may finally reach day of reckoning

  • John L. Smith
January 19, 2022 11:00 PM

The long, bruising litigation pitting Asian American Entertainment Corp. against Las Vegas Sands in Macau appears to be finally running its course after a two-decade battle over a soured partnership that stretches all the way back to the beginning of the casino gold rush in the former Portuguese protectorate.

Unless there is another delay – a big “if” in this protracted legal battle — closing arguments in the case are scheduled for Jan. 21 in Macau’s Court of First Instance.

Threatening to drag the litigation even further is a remarkable development worthy of a television legal drama: the allegation by the defense that the signature of then-Sands president and COO William Weidner on a Memorandum of Understanding written in 2002 that outlined the partnership between LVS and AAEC was a fabrication. It was a contention not previously raised in a litigation originally filed back on January 19, 2012, in Macau. An initial lawsuit filed in the United States in 2007 was dismissed due to the statute of limitations.

Initially, the plaintiffs estimated AAEC’s loss at as much as $12 billion. That figure was hotly disputed. On Jan. 4, a final report produced by Ducker Research & Consulting Inc. evaluating the “lost-profit damages” by AAEC in Macau was completed. The loss period analyzed covered the length of the 20-year concession from 2002 to 2022. Estimated lost earnings to AAEC: $7.4 billion.

Last week, operators in Macau received some clarity with the announcement of a proposed revision in the gaming law there. The future number of license concessions will be set at six for a duration of 10 years with the possibility of a three-year extension. The bill was submitted to the Legislative Assembly for debate and the anticipated eventual approval.

The two corporations led by business titans weren’t always at odds. In October 2001, AAAEC and LVS entered into a preliminary agreement to work together to win a coveted casino license in Macau. The parties committed to negotiate terms exclusively and confidentially.

They worked through the application process the rest of the year as they ironed out the terms of their own partnership. The terms shifted by the day and by the end of January, LVS was courting a new partner, Galaxy Entertainment Group. Under that iteration, the LVS/Galaxy proposal was approved for licensure. That partnership later ended, at least in part due to Galaxy’s desire to allow super-lucrative VIP gambling rooms to be run by associates of criminal triads, Weidner contended in a deposition.

AAEC has long contended that LVS began courting Galaxy prior to officially ending its prior agreement and in doing so violated its legal obligation.

Among its defenses, LVS has argued that the initial case in Nevada was dismissed with prejudice, that a key subsidiary of the company lacked legal standing, and that in fact it was AAEC that acted in bad faith.

And now it offers the court the argument that Weidner’s signature was fabricated, which led AAEC lawyer Jorge Menezes to wonder aloud, “The majority of the documents used in this case have been copied from originals which none of us have had access to. I find it strange that only now this seems to be a problem for the defense.”

If this drawn-out legal fight over a failed partnership involving LVS has a familiar ring to it, that’s probably because it’s one of several similar litigations to arise out of the company’s efforts to win a Macau casino concession. Previous lawsuits got ugly, but did not go well.

Prior to LVS founder Sheldon Adelson’s Jan. 11, 2021 death, his company settled three cases for a whopping $210 million. That was only after multiple losses and appeals.

That’s small change compared to what’s at stake now.

A loss would devastate its bottom line, along with Macau credibility in the post-Adelson era. Adelson is gone, but the pugnacious business tactics and obsessive litigiousness he practiced continue to haunt the corporation he built into a casino industry leader.