Las Vegas Sands continues eyeing casino development in New York, Texas, and Florida

April 28, 2022 12:21 AM
  • Buck Wargo, CDC Gaming Reports
April 28, 2022 12:21 AM
  • Buck Wargo, CDC Gaming Reports
  • United States
  • Florida
  • New York
  • Singapore
  • Texas

Marina Bay Sands in Singapore led the way for Las Vegas Sands Corp. during the first quarter as the company’s properties in Macau remain impacted by COVID-19, while LVS is primed for expansion in Asia and the U.S, including New York, Texas and Florida, company executives said during a first-quarter earnings call on Wednesday.

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LVS reported net revenue of $943 million, compared to $1.2 billion in the first quarter of 2021. Operating loss was $302 million, compared to $96 million in the prior-year quarter. Net loss from continuing operations in the first quarter of 2022 was $478 million, compared to $280 million in the first quarter of 2021.

Consolidated adjusted property EBITDA was $110 million, compared to $244 million year over year and LVS reported it generated positive EBITDA at Marina Bay Sands.

“Our results continue to reflect the pandemic’s impact,” said Robert Goldstein, chairman and CEO. “Travel restrictions suppressed visitation in our financial results in both Macau and Singapore. The good news in Singapore is that travel corridors established last quarter have been replaced with the introduction of the vaccinated-traveler framework, which will allow vaccinated travelers to enter Singapore in much the same way as prior to the pandemic. We’re open for business in Singapore and our long-term opportunities remain steadfast – a billion-dollar investment underway at MBS that will introduce luxurious new suite products and amenities (and be completed by the end of 2023).”

Goldstein said LVS continues to pursue opportunities to develop large-scale resorts in Asia and the U.S. He cited the first-quarter sale of its Las Vegas Strip assets – the Venetian, Palazzo, and Venetian Expo Center for $5.05 billion in cash and $1.2 billion in seller financing in the form of a six-year secured loan.

“We’re going to build out our digital presence and explore multiple opportunities,” Goldstein said.

As for opportunities in New York, Goldstein said it’s “been on the radar for a long time and we continue to be in the hunt there. I don’t want to get into specific locations. We remain interested. It’s a huge market for us. There’s quite a long way to go in the process.”

LVS President and COO Patrick Dumont told Wall Street analysts they’re focused on new development and the sales in Las Vegas were behind the strategy to pursue those opportunities.

“We feel very strongly about our development capabilities and our ability to execute large-scale developments in the market, and we think there are a lot of them out there,” Dumont said. “There’s a lot of potential and we’re waiting to see which ones come forward where we can invest and get the highest return. We’re focused very much on building rather than buying. We want to make sure we create a lot of long-term value. Our company has a history of being a platform of development and entrepreneurship and we’re taking that approach to our digital efforts in several different areas. We think over time that will provide the most reward for shareholders. We’re very patient and thinking long term.”

Goldstein added that they’re looking to construct large-scale buildings that can create large adjusted earnings. They’re not interested in being a small regional player.

“That limits the opportunities to Texas and New York,” Goldstein said. “We failed in Florida recently (with a petition drive to expand gambling with a constitutional amendment on the ballot), but we’re not done with Florida. There are few places we can go to invest the kind of money we want to invest and the kind of returns we want. We’re not going to buy small businesses.”

As for Macau, Goldstein said their investments are nearing completion and as the market recovers, the Londoner will provide growth opportunities in both the premium and mass-customer segments.

“While the current-quarter results in Macau were impacted severely by the enhanced travel restrictions in China, customer demand and spending in Macau have proven to be resilient at the premium mass level in both the gaming and retail perspective in periods when restrictions have been relaxed,” Goldstein said. “We’re confident we’ll return to positive cash flow in both Singapore and Macau in the future as restrictions are eased and travel and tourism recover.”

In March, LVS executives saw outsized demand in Singapore from independent travelers on the leisure side, premium mass, and high-end play coming from all over the Pacific Rim.

“Singapore is in a unique position,” Goldstein said. “Obviously, Macau is in a difficult place right now, so people are gravitating to other opportunities. They want to travel. They’re not different than what we’ve seen here in the U.S. I think the MBS product is in a unique opportunity window. We’re hoping Macau opens up sooner, but until it does, I think we’ll see a lot more demand than is typical from all segments. It feels like we’re in the middle of a very positive beginning and hopefully without a COVID interruption and change in policy, I believe MBS will have a very productive 2022.”

Wilfred Wong, president Sands China, told investors that the timeline for retendering concessions in Macau has been impacted by the approval of two bills related to the gaming law by the legislative assembly. That will be approved in full before the end of the session in August, he said.

“We’re hearing all kinds of suggestions that it will be earlier,” Wong said. “At this stage, we’re going to be granted an extension on the current concessions until the end of 2022. That is the time we expect the retendering exercise will be completed. After the amendments of the law, the retendering procedure will start and a lot of information about the retendering will come out. We’re in the process of preparing for that retendering exercise and hopefully everything will be done before the end of 2022.”