Casino operator Las Vegas Sands may have to ditch the ‘Vegas’ branding as it mulls the sale of its two remaining US gambling venues.
Late Monday, Sands confirmed rumors that circulated earlier in the day regarding the company’s preliminary discussions with parties unknown to sell its two Las Vegas Strip hotel casinos, the Venetian and Palazzo, as well as the Sands Expo Convention Center. Sands sold its one other US property, Pennsylvania’s Sands Bethlehem, in 2018.
Bloomberg reported that Sands had enlisted the help of an adviser to drum up interest in a potential Vegas fire sale, which analysts suggested could bring in $6b. Sands long-time spokesman Ron Reese later confirmed that sale discussions had taken place but nothing was written in stone just yet.
The news comes just days after Sands reported a net loss of $731m in the third quarter of 2020, a period in which the company’s Singapore resort Marina Bay Sands was the only one to generate positive earnings. That loss followed an even bigger loss of nearly $1b in Q2.
Sands boss Sheldon Adelson is widely hailed as pioneering the concept of an integrated resort, incorporating not just gaming and hotel operations but also devoting a significant portion of real estate to MICE space (meetings, incentives, conferences and exhibitions). In fact, Adelson only got into gaming after years of experience running the COMDEX computer trade shows in Vegas.
The very idea of Sands exiting Vegas speaks volumes as to how pejoratively Adelson appears to view the city’s near-term ability to regain its pre-pandemic glories. During last week’s earnings call, Adelson and Sands President Rob Goldstein emphasized that Vegas wouldn’t truly get back on its feet until group tours resumed and the convention business picked up.
Last week, the McCarran International Airport in Las Vegas reported September’s passenger traffic was a mere 1.7m souls, around 60% below the same month last year. Worse, international travellers were down 96%. At the moment, most of the people arriving in Vegas are coming by car from neighboring states.
While Sands may be pessimistic regarding the US casino market, it’s forging ahead with major expansion plans in Macau and Singapore. Exiting the US market may also alleviate Sands of the occasionally irksome oversight by US federal authorities, who have previously collected tens of millions of dollars in penalties related to financial shenanigans at Sands’ Asian and US operations.