Las Vegas Sands still has that New York state of mind.
After all, CEO Rob Goldstein said the company has “been looking at New York for, I think, about 100 years, it seems like. I don’t think it’s any secret that we’re big believers in New York.”
Goldstein was exaggerating a bit during the company’s fourth-quarter earnings conference call last week, but the potential for an integrated casino-resort in New York City has been refueled by the Empire State’s pandemic-influenced budget deficit, estimated at between $70 billion and $75 billion over the next four years.
Could New York City soon be home to a resort casino? Shutterstock Photo
Voters back in 2013 authorized up to three casinos for the nation’s largest city, but under state law, they can’t be approved until 2023 at the earliest. Upstate casinos were given the first bite of the apple.
Las Vegas Sands has been seeking to push up the timeline since 2019. The company brought in former New York Gov. David Paterson to help steer efforts for a New York City casino license. The company issued a report saying an integrated resort in Manhattan could bring $1.5 billion in revenue to fund the New York Metropolitan Transportation Authority, public education, and other needs.
Last week, analysts from Spectrum Gaming Group issued a 358-page study for the New York State Gaming Commission that evaluated the entire New York gaming market. Spectrum reviewed off-track betting facilities, tribal casinos, an expansion of sports betting, and the potential ramifications of three full-scale New York City casinos.
Las Vegas Sands CEO Rob Goldstein is interviewed on CNBC
Under multiple scenarios, which include expanding the region’s two current video lottery-only properties – Resorts World at the Aqueduct Racetrack in Queens and MGM Resorts’ Empire City Casino in Yonkers – analysts said expanded gaming could grow the state’s economy between $3.7 billion and $4.6 billion annually.
“We have a very good product, (and) a good product there would be extraordinary,” Goldstein said. “So we’re definitely on the hunt.”
He alluded to the Spectrum report as a road map.
“It’s still a long way to go before we ever see where they want to build and what they want to build, but we are going to be there. If it’s real and it’s done properly, we think the returns could be Sheldon-like, OK? So that’s interesting.”
That last part was in reference to the late Las Vegas Sands founder, Sheldon Adelson, whose investments in Las Vegas, Macau, and Singapore over the past two decades fueled the company to an industry-high $13.739 billion in net revenues in 2019.
Unless Las Vegas Sands is successful in convincing lawmakers to move up the timeline, New York is a couple of years down the road.
It’s the same with Texas, where casino-gaming legalization is once again on the state’s legislative radar and Las Vegas Sands has beefed up its lobbying team in Austin.
Both opportunities, Goldstein said, could be funded through a balance sheet that had pre-pandemic cash flow of roughly $5.5 billion in 2019.
Overhanging the conversation is a possible sale of the Las Vegas holdings – Venetian, Palazzo and Sands Expo and Convention Center. In October, Las Vegas Sands confirmed it was talking with an advisor about a potential deal that could bring in $6 billion or more.
Goldstein and Las Vegas Sands President Patrick Dumont said there was nothing new to report.
“The way we think about our portfolio is we sort of evaluate projects on a case-by-case basis,” Dumont said. “So Las Vegas is a stand-alone entity. We’ve operated it for a long time. We think it’s a great asset. We think it has a great future. So obviously, we’re focused on operating at this point.”
Added Goldstein, “Obviously, we have a very strong balance sheet, whether we sell in Las Vegas or not.”
Deutsche Bank gaming analyst Carlo Santarelli surmised that the company’s upbeat tone on Las Vegas might lead some to “construe” there is an “active dialogue.”
For Las Vegas Sands, New York is just a prospect. Singapore and Macau are immediate.
The company is spending $3.3 billion to expand the Marina Bay Sands in Singapore and is opening portions of The Londoner in Macau, a $2.2 billion redevelopment of the Sands Cotai Central.
On the horizon is the Macau relicensing process. The company’s concession expires in June 2022 and the Macau government has yet to provide guidelines for the reapplication process.
Goldstein believes Macau will require a “rather substantial capital investment” from concession holders.
As for New York and Texas?
“These are opportunities that with our balance sheet, our strength, we would jump in with both feet if it was the right structure,” Goldstein said.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
