Casino operator Las Vegas Sands has withdrawn its name from the race to win one of Japan’s three highly prized integrated resort licenses.
On Tuesday, Sands stunned the gaming world by issuing a statement indicating that the company “will discontinue its pursuit of integrated resort (IR) development in Japan.” Sand boss Sheldon Adelson (pictured) said it was time for his company “to focus our energy on other opportunities.”
Sands was one of the earliest proponents of a Japanese opportunity, famously vowing to spend “whatever it takes” on a property that would draw the world’s gamblers. But that initial vow to spend $10b led to an endless game of one-upmanship by rivals, prompting Sands president Rob Goldstein to openly muse late last year about whether pursuing an IR license was still “prudent.”
Adelson said Tuesday that his “fondness for the Japanese culture” goes back 30 years to his days operating COMDEX shows in the country, and while his “positive feelings for Japan are undiminished … the framework around the development of an IR has made our goals there unreachable.”
Sands reportedly took issue with Japan’s decision to limit licenses for a 10-year initial term, while other operators have expressed reservations about Japan’s limits on local residents’ accessing casinos, as well as general concerns about tax rates and taxation on foreign gamblers’ winnings.
Sands, like all other casino operators, is currently struggling with the impact of the COVID-19 pandemic on its business. Sands posted a rare net loss of $55m in the first quarter of this year, and the company was forced to suspend its dividend program.
Regardless, Adelson said Tuesday that he remains “extremely bullish about the future of our company and its growth prospects.” Adelson also suggested that the IR model that Sands helped to pioneer “will ultimately be considered by other Asian countries, particularly as governments look to increase leisure and business tourism as a driver of economic growth.”
The Japanese license withdrawal will likely further stoke rumors that Sands is conserving capital to make a large acquisition involving one of its struggling rivals, with Australia’s Crown Resorts and the Philippines’ Okada Manila recently tipped as possible acquisition targets.
Sands’ exit will also boost the chances of the remaining casino biggies pursuing Japanese gold, including Galaxy Entertainment, Genting, Melco Resorts & Entertainment, MGM Resorts and Wynn Resorts.
