A 2007 lawsuit filed by Asian American Entertainment Corporation (AAEC), the original operator and partner of Las Vegas Sands Inc (LVS), against the latter is getting underway in Macau. This court battle could end up costing Las Vegas Sands a whopping $12.1 billion (MOP$96.5 billion) in compensation to its former operator. Further, the case will possibly shed some more light on how the much sought-after casino licenses in the gaming Mecca of the East were awarded back in 2001.
AAEC, steered by Marshall Hao, a prominent Taiwanese businessman, is seeking damages of about 70% of the profits that LVS amassed in Macau for nearly two decades, from 2004 to 2002. In the lawsuit, AAEC is seeking the said multi-billion-dollar compensation, alleging that LVS breached the contract after withdrawing from their joint bid for a casino license in China’s Special Administrative Region in 2002. After exiting the previous arrangement with AAEC, LVS penned the agreement with Galaxy Entertainment Group instead, which ultimately won the duo the Macau license.
Asian American Lost Its First Legal Battle Against Sands in 2007
The first round of Asian American vs. Las Vegas Sands took place in 2007 in Nevada. At that time, AAEC took legal action against Las Vegas Sands Inc, Venetian Venture Development LLC, and Venetian Casino Resorts LLC. However, to Asian American’s dismay, the case was dismissed three years later in 2010, as the operator failed to retain counsel and prosecute the case.
Nearly a decade later, round two of AAEC vs. LVS commenced when Asian American filed a new suit in January 2019 with the Tribunal Judicial de Base in Macau. This time, Marshall Hao’s team launched legal action against Las Vegas Sands LLC, Las Vegas Sands Nevada, Venetian Casino, and Venetian Macau Ltd. Asian American first demanded $375 million (MOP$3 billion) in damages, but six months later, the amount of money sought in damages was dramatically increased to $12.1 billion.
After revising the claim, AAEC disclosed it increased the figure to cover the profit lost in the 14 years between 2004 and 2018. In addition, Asian American indicated that the new multi-billion-dollar claim also factored in the right it reserved to claim for returns it would have garnered until 2022 when the LVS concession license in Macau is set to expire. Sands is expected to re-bid for a gaming license through a public tender in 2022.
Will the Second Time Be A Charm for Asian American?
In a report by Reuters, Mr. Hao disclosed that Las Vegas Sands walked out of their initially inked joint venture and ended up striking a near-identical concessions deal with Galaxy. The trial for AAEC vs. LVS started on Wednesday, June 16th and this time, Marshall Hao is optimistic about the chances of winning this legal bout. In the Reuters coverage, Mr. Hao was quoted saying:
“Asian American has been winning all major legal battles in the Macau lawsuit since we filed it in 2012...we are confident.”
LVS, on its part, moved to avoid the trial in 2019 by launching a series of legal countersuits both in Macau and Nevada but its efforts were futile. At the time, Las Vegas Sands insisted that:
“…this case has no merit. We have confidence that ultimately the Macao judicial process will reach the same conclusion.”
It’s worth noting that the Sands management team admitted that it couldn’t estimate what repercussions the lawsuit would have for the company in its latest annual report. Part of Sands' most recent report reads that the company is "…currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any”
The recently rebranded Sands company has previously been taken to court on several occasions regarding its dealings in the gambling hub of the East, including how it managed to secure the much-coveted Macau casino license. This trial comes when the gaming giant is trying to recover from revenue shortfall brought about by 2020’s pandemic crisis.