Though Las Vegas Sands founder Sheldon Adelson is gone, yet another lawsuit over the company’s lucrative Macau gaming license continues to generate headlines.
Something about a lawsuit claiming up to $12 billion in damages tends to make heads turn.
Back at the start of the century, Sands and Taiwanese businessman Marshall Hao’s Asia American Entertainment Corporation looked like fast friends and inside favorites to land a coveted casino license in the gambling haven. In 2001, they submitted a joint bid.
In a scenario that may sound familiar to others associated with the Sands’ remarkable Macau success story, the partners had a falling out. Sands then cut ties with Asian American and instead partnered with Galaxy Entertainment of Hong Kong.
Asian American was left steaming on the sidelines. Hao, to no surprise, did not take being jilted well. The company has been in courts in the U.S. and Macau for the better part of the past two decades litigating what it alleges is a breach of contract.
Asian American’s 2007 lawsuit filed in the U.S. was dismissed on legal technicalities and a judge’s finding that the statute of limitations had passed. The company then took its fight to Macau with a 2012 lawsuit that has been grinding away for the past decade. As Reuters reported last week, a trial alleging breach of contract is scheduled to start June 16 in Macau.
Asian American is seeking damages of up to 70 percent of Sands’ profits in Macau from 2004 through 2022. That’s approximately $12 billion, according to Reuters.
Although the road to trial has been a long one, Hao told Reuters’ Farah Masters, “Asian American has been winning all major legal battles in the Macau lawsuit since we filed it in 2012. … We are confident.”
Sands confidently counters that the lawsuit “has no merit.”
We’ve heard such confidence before. Sands, however, has a decidedly mixed track record in litigations associated with its immensely profitable Macau venture.
As gaming reporter Howard Stutz compiled in his obituary of Adelson, who died Jan. 11 in California at 87 after a long illness, the casino king’s three lawsuit settlements associated with Macau cost a combined $217 million. It’s a stunning figure, but those who watched Adelson’s career came to understand that pugnacious and even vexatious litigation was part of his business strategy.
Leaving out the withering and ultimately costly lawsuit over the construction of the original Venetian in Las Vegas and focusing only on the Macau sojourn, in 2009, three men who said they had helped the company get its Macau casino license were awarded $42.5 million in a settlement.
In 2016, the company was again cutting a big check, this time for $78.9 million to its former Macau president, Steve Jacobs. Although the company downplayed the loss in its quarterly earnings report, ugly details emerged during the litigation that stained its image.
Then there was the 2019 settlement with Richard Suen, the Hong Kong businessman who also said he played an integral role in the company’s Macau licensing effort. Adelson’s legendary obsession with taking his grievances to court backfired time and again. After one trial, in 2008, Suen was awarded $43 million.
Adelson appealed. The case was remanded by the Nevada Supreme Court.
After a second trial, in 2013, Suen was awarded $70 million. Adelson appealed. The case was again remanded.
Just two days into a third trial, with some gaming observers wondering whether Sands had a legal strategy that extended beyond Adelson’s own obsession with winning, a settlement was at last reached. It was a jaw-dropper. Suen received $96 million.
Adelson could afford it, of course. He remained one of the world’s richest men.
But now it appears the company he founded is again headed back to court after yet another challenge associated with its Macau license, which is up for renewal in 2022. Some might consider the relicensing challenges alone a reason to proceed cautiously.
We don’t know how this $12 billion gamble will turn out.
We can safely guess how Sheldon Adelson would have handled it.
