Las Vegas Sands and online gaming: Is the interest real or all about nothing? By Howard Stutz, Executive Editor, CDC Gaming Reports April 27, 2021 at 7:00 pm The television sitcom “Seinfeld” billed itself as “a show about nothing.” That term best describes Las Vegas Sands’ exploration into the world of digital gaming, online sports betting, and online casinos. On a conference call last week, Sands Chairman and CEO Rob Goldstein fielded the same question concerning digital gaming from multiple analysts: “What is the company’s approach?” Shutterstock/Online gaming In January, Goldstein said Sands was considering its options in the segment. Three months later, the answer was the same: “We are exploring multiple opportunities … and we’ll update you at the appropriate time.” In other words, for now, it’s much ado about nothing. Las Vegas Sands is taking its time as the sports betting and igaming arenas expand. In less than three years, more than half of the U.S. states have legalized sports betting, the majority of which offer mobile and online sports betting alternatives. Internet casino gaming is legal and available in five states with legislation pending in other markets. Although there weren’t clear answers to their queries, analysts told investors following the conference call that Las Vegas Sands is using the correct methodology. “Given it still remains an embryonic market, Las Vegas Sands is taking a smart and targeted approach, whereby they could leverage their balance sheet to pursue either (mergers and acquisitions) or organic growth opportunities within the U.S. or abroad,” Deutsche Bank gaming analyst Carlo Santarelli said in a research note. Goldstein suggested Sands will have a material digital presence some time down the road. “The company is actively exploring potential opportunities that could stretch beyond just sports betting and igaming and even beyond the U.S. as well,” said Union Gaming Group analyst John DeCree. “We wouldn’t expect Las Vegas Sands to rush into anything, so it could take several quarters for management to hash out a plan.” History, however, calls into question the challenges Las Vegas Sands faces in jumping into the online gaming world. Up until January, the company’s corporate policy toward online gaming was strict opposition. Las Vegas Sands founder and billionaire mogul Sheldon Adelson long expressed moral disapproval toward Internet gaming, believing the activity would diminish results at traditional casinos and could lead to increased problem- and underage-gambling issues. He spent millions of dollars funding like-minded grassroots organizations in efforts to kill any hint of favorable state-by-state legislative activity to legalize online gaming. Adelson funded the Coalition to Stop Internet Gambling and backed Congressional efforts to restore the Wire Act to its pre-2011 interpretation. That influence led to the Department of Justice’s 2019 reversal of its eight-year-old interpretation of the Federal Wire Act. Lobbyists for Adelson, according to the Wall Street Journal, drafted the memo that was sent to top Justice Department officials in 2017, which made a case that the 2011 opinion on the Wire Act by the DOJ was in error. Following the second reinterpretation, New Hampshire officials sued the Justice Department. The state has won on both the federal district court and circuit court levels. With the switch over to the Biden Administration and the appointment of Attorney General Merrick Garland, there is little appetite to appeal the New Hampshire ruling. Adelson’s death on Jan. 11 altered Las Vegas Sands’ direction. Las Vegas Sands Chairman and CEO Rob Goldstein Goldstein said in January that Adelson had ethical concerns about online gaming and how to police it against younger players. “He never questioned its viability,” Goldstein said. The company is also in the middle of a sea change. It is in the process of selling the Venetian, Palazzo, Sands Expo, and 63 acres of Strip real estate for $6.25 billion to VICI Properties and Apollo Global Management. The deal is expected to close by the end year and Goldstein said last week the company will use the bulk of the proceeds to grow its operations in Macau and Singapore and return capital to shareholders, possibly in the form of dividends. “We have a big appetite, but as you know, that market is still developing,” Goldstein said last week about online gaming. “We’re just not ready yet to disclose what we’re going to do because we haven’t decided.” Las Vegas Sands is seeking possible integrated resort opportunities in New York City and Texas, but they appear fleeting. In most states, online gaming and sports betting are tied to a casino. Without any U.S. properties post-December, Las Vegas Sands is an Asian gaming company. Santarelli said Sands would put up an investment if it determines online gaming has the ability to move the needle from a fundamental perspective. “Frankly, we don’t see any foray into sports and icasino being entirely needle-moving for Las Vegas Sands,” Santarelli said. “It appears management, at least to some degree, agrees, while still coveting the valuations being applied to the segment.” We may not find out until 2022 after the sale of its Strip properties close if an online gaming move is just a show about nothing for Las Vegas Sands. Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at email@example.com. Follow @howardstutz on Twitter.