A changing of the guard at the Sands By Ken Adams, CDC Gaming Reports February 1, 2021 at 2:00 am Sheldon Adelson died and left the reins of Las Vegas Sands in the hands of his second-in-command, Rob Goldstein. Goldstein inherits the reins, but not the stock and ownership control of the company. Adelson’s wife, Miriam, gets the stock. In time, Miriam may be able to exercise some control over the company, but not until she is licensed in Nevada and receives approval from Macau and Singapore. Upon Adelson’s death, Goldstein reaffirmed his support of Adelson’s values, goals, and agenda. Adelson had big plans: He wanted to bring Macau-like strips to Spain, Texas, Miami, and New York City; he also wanted to expand in Singapore and Macau. Goldstein is sure to pursue those plans. The Venetian Macau Although it is barely three weeks since Adelson died, the company has not been standing still. The first news of the company under Goldstein came from media reports in Texas. The Texas Tribune reported the Sands had added lobbyists in Texas; its team ballooned to 51 members. That sounds like a serious effort. A spokesperson for the Sands said the company looked forward to working with lawmakers to present the opportunities for long-term economic development in the Lone Star State. In the past, the Sands had called Texas a desirable plum. Texas does not have casinos, but it does have gamblers. Texas gamblers are famous, not only for their high rolling in Las Vegas but also for the constant stream of regular players that feed casinos in Louisiana. For Rob Goldstein, the fourth-quarter earnings call was the first opportunity to present some of his own ideas. He may be loyal to Adelson’s memory, but Goldstein would be a rare person indeed if he did not want to put his own stamp on the company. As expected, revenue, EBITDA, and operating profit/loss were all down significantly from the same quarter in 2019. The Sands has properties in Las Vegas, Macau, and Singapore; all three jurisdictions have been heavily impacted by the pandemic and government restrictions on operations. Still, the company remains optimistic about the future, opining that Las Vegas, Macau, and Singapore will bounce back — If not in 2021, then in 2022. As interesting as the results of the first gaming company to report for the fourth quarter were, no one was terribly interested. The analysts wanted to know if there is a plan to sell the Las Vegas assets. An asset sale does not necessarily mean selling the operations. The Sands is one of the few gaming companies that has not taken advantage of the red-hot REIT market. Does the Sands intend to take advantage of the REITs to enhance its cash reserves and to have money for other projects? CEO Goldstein said if it made long-term sense, the company would consider the option. That comment was no more than Adelson had said. The Sands has never been particularly secretive, but it is playing its cards close to vest on its intentions in Las Vegas. The analysts also wanted to know if the Sands was still committed to Macau. Goldstein answered that question by saying that if the Sands’ license is renewed next year, it will invest between $5 billion and $10 billion. That answer was probably intended more for Macau gaming regulators than anyone else as a carrot, a sweetener for license renewal. The license situation is far from clear in Macau. The criteria for renewal have not been published yet and the government has been coy when answering questions. In the meantime, the Londoner is set to begin opening on February 8. The Londoner is a $400 million remodel and rebranding of the former Sands Cotai Central. Goldstein also said the Sands was committed to Singapore; the Marina Bay Sands was the company’s most profitable casino in the fourth quarter. The Sands is undertaking a $3 billion expansion of the MBS. Goldstein said, “These are not small investments.” Goldstein updated the market on its New York plans. He said the company has been interested in New York for a hundred years. A slight exaggeration, but the Sands has been lobbying for a Sands New York City for at least five. “I think it’s close to $2 billion (net revenue) right now, just in the facilities that are there, without table games or decent rooms or really a decent product,” Goldstein said. “A good product there will be extraordinary.” One could argue that with casinos in New York City, Texas, Macau, and Singapore, Las Vegas Sands Corp. would be the most diverse and profitable casino company in the industry. A presence on the Las Vegas Strip is probably a necessary part of the strategy. Goldstein did not mince words when talking about Las Vegas. He said some were saying the boom days of Vegas had passed, though he thought them to be very wrong. He predicted that the Strip will be back, with its full complement of conventions, sports, and shows; he said, “There is still plenty of gas left in the tank. We remain very bullish on the return of Las Vegas. This is a unique town.” One other area interested the analysts: online, mobile, and sports betting. Sports betting, particularly mobile betting, is the hottest trend in the industry right now. Penn National, MGM, Caesars, Wynn, Boyd, Golden Nugget and Bally’s have been aggressively pursuing licenses, along with media, professional sports, betting company, and social-media partnerships. Those companies have spent billions in the last year buying companies, merging, and forming partnerships. The Sands has been noticeably absent from the fray. In fact, Sheldon Adelson was a very vocal opponent of online gambling of any type. He used his money and political influence to oppose online gambling at every opportunity, including finding sponsors, like Arizona Senator John McCain, for federal legislation prohibiting any form of online gambling. It seems now that his opposition belonged to a bygone era. The new CEO and Chairman of the Las Vegas Sands is open to the possibility. Goldstein said that even when Adelson was opposing online gambling, he never denied its potential. Goldstein appears to think the time is right for a change of strategies and to grab for the brass ring. “I have very strong thoughts about this. We just want to keep working toward our goals. It’s a very interesting business. The question is, can we bring something to the table that can make a lot of money.” This is Rob Goldstein’s chance; the other current growth possibilities were Sheldon’s ideas. If the company has success and “makes a lot of money” from online/mobile and sports betting, it will be Goldstein’s legacy, not Adelson’s. It took only three weeks, but clearly, the guard has changed at the Las Vegas Sands.