On 3 March 2021, Las Vegas Sands announced that it had reached an agreement to sell off its entire Las Vegas property portfolio, providing in return an extensive and powerful US$6.25 billion war chest.
Coming less than two months after the passing of founder Sheldon Adelson, the decision to sell, albeit hinted at in earnings calls last year, suggests that arguably the most successful casino company in the world has entered a new era as it turns its attention to other growth opportunities.
In particular, LVS has flagged an increased focus on Asia, home to its most lucrative assets in Macau and Singapore. But where might that US$6 billion plus realistically end up? As they say in the classics, the possibilities are endless!
One thing we can be certain of is further investment in Macau and Singapore. While LVS is already nearing completion of its most recent US$2 billion spend to upgrade Sands Cotai Central to The Londoner Macao, the company’s Chairman and CEO Rob Goldstein said during January’s 4Q20 earnings call that he expected a promise of further investment to form part of Macau’s re-tendering process and was happy to oblige to the tune of another US$5 billion to US$10 billion.
“There is just no place like Macau [and] we’re not done in Macau. We’re going to be there for many more years,” Goldstein told analysts at the time.
Likewise, LVS has already funded an ongoing US$3.3 billion expansion of Marina Bay Sands in Singapore, including the addition of a fourth hotel tower, but has also promised to spend more on upgrading the existing towers to match.
Japan remains very much a land in limbo, with LVS having already pulled out of a bid in Yokohama due to escalating costs and what Adelson said was a “framework around the development of an IR” that made the company’s goals there “unreachable.”
Any Japanese IR in a metropolitan location is expected to cost at least US$8 billion and most likely over US$10 billion, so the opportunity would need to be compelling. But should Tokyo with its huge population base join the race later this year, as some believe it will, there is every chance LVS will come racing back.
Could LVS acquire an existing operation? The obvious option is Australia’s Crown Resorts. Currently embroiled in a series of inquiries over its suitability to retain casino licenses in Victoria and Western Australia – after NSW already said no – Crown appears to be ripe for the picking. Certainly The Blackstone Group thinks so, having made an AU$8 billion (US$6.1 billion) offer to acquire all outstanding shares. But, as a company with strong casino experience and a record of regulatory green lights in Nevada, it could be argued LVS brings much more to the table than an investment group like Blackstone.
The one other realistic option for LVS is Thailand. Although many rivers need to be crossed before Thailand legalizes casino gaming, the Prime Minister got tongues wagging at least when he said he was open to the idea in January.
LVS has stated in the past its interest in developing an IR in Bangkok, and, with a national population of 70 million people, there is a mountain of potential for Thailand to become Asia’s “next big thing.” The sands of time will answer all.
