Las Vegas Sands Mulling Over $6b Sale of Its Sin City Properties

Las Vegas Sands Corporation, the largest land-based casino operator in the world is considering the sale of its US-based casinos to move out of the United States gambling industry at least for now. The flagship Sands properties that are included in this potential sale are the Palazzo, the Venetian Resort Las Vegas, and the Sands Expo Convention Center, which are currently projected to be worth at least $6 billion combined.

Should this sale bear fruition, the Las Vegas Sands Corp will officially direct its focus solely on the Asian market in Macau and Singapore, where its other casino properties are situated. According to a fresh report that was published by Bloomberg, the casino giant has teamed up with an adviser in a bid to solicit interest from potential buyers of the properties. Additionally, the news outlet established that an inside person informed them that the sale discussions were still at a very early stage and there’s no official confirmation of anything yet.

2020 Has Been a Sour Year for Las Vegas Sands Corp

The land-based gambling industry has been taking a beating since March when the novel Coronavirus was declared a pandemic by the World Health Organization. Like any other company that thrives on travel and large masses of people coming together in one spot, Las Vegas Sands has been hit hard. By 30th June this year, it was reported that the company had racked up a total outstanding debt of $13.82 billion, and this figure excluded financial leases.

Sheldon Adelson, the chair and Chief Executive Officer of the Sands group, who also happens to be one of the richest people in the globe with an estimated fortune of $30 billion, had however indicated that the company’s recovery from the Coronavirus fiasco was already underway. For Q3 2020, the gaming conglomerate reported a $586 million loss, with revenue falling by 82.5% year over year.

True to Adelson’s word, this was an improvement compared to the $985 million loss that they reported for the second quarter of this year due to the COVID-19 pandemic. The Q2 revenue was down 97.1% compared to the same period in 2019 in which $1.11 billion in revenue was collected.

Either way, 2020 hasn’t been an easy year for Las Vegas Sands Corp. Earlier in May, the gaming company ended its pursuit for the lunch of a $10 billion Integrated Resort (IR) in Japan, and it did not offer any reason whatsoever for the unanticipated move.

Is the USA Market Losing Significance for Sands?

As alarming as this sale is, some industry analysts have pointed out that this move makes plenty of sense for Adelson’s company which is currently estimated to have a market value worth $37.5 billion. In 2019 for instance, less than 15% of the revenue that Sands collected came from its US business, meaning that the US market is probably becoming a less significant priority for the company.

Thus, by selling its Sin City properties the company could bring in more money that could be used to fund its other development prospects elsewhere. For instance, Sands is currently carrying out a major overhaul of its properties in Asia, which includes a $3.3 billion expansion project of its Marina Bay Sands Property in Singapore, and a $2.2 billion renovation of Sands Cotai Central to transform it into the Londoner Macao.

But then again, as crystal clear as a US exit it may seem, we shouldn’t cross out Sands’ presence in the USA yet. Adelson, the 87-year-old billionaire CEO of the gaming leviathan expressed interest in venturing into New York City, an expansion opportunity that may ripen in 2021.