LVS Will Push On in Asia Following Adelson’s Death
One of the world’s largest casino conglomerates this week lost its founder and captain. The Las Vegas Sands Chairman Sheldon Adelson passed away this week leaving behind a legacy of innovation and disruptive entrepreneurial spirit across the entire gambling sector. The upper-management of the Las Vegas Sands dynasty have pledged to continue their operational focus in the Asian peninsula and try to capture an ever-greater market share in this lucrative part of the global gambling industry.
As has been widely reported around the world this week, the casino mogul Sheldon Adelson has died. The magnate passed away following complications from non-Hodkinson’s lymphoma. The 87-year-old has been widely credited with being the first westerner to see the potential in Macau as an entertainment hotspot on the same footing as Las Vegas. Through his expert knack for business and instinct for high-growth ventures, Adelson certainly played a big role in the evolution of Macau into the gambling metropolis it is today.
Kickstarting his vision into a tangible project was the Las Vegas Sands resort that first opened in Macau. This casino was a revelation to the region, that up until that point had never witnessed gaming venues being constructed on such high-budgets and opulence. This vision was further extended with the opening of Marina Bay Sands in Singapore in 2010, up until today this casino remains one of the most profitable in the world.
Adelson’s Las Vegas Sands has now poised themselves to remain a dominant force in the region despite the passing of their visionary founder. Today, the casino brand remains one of the largest in China, controlling five integrated resorts in the region and allowing millions of customers to travel from the mainland each year to visit the venues.
Sands’ Practical Commitment to Asia
From the point of view of an economist, Sands’ focus on the Asian market makes practical business sense whichever way you look at it. When the pandemic finally subsides, which with a global rollout of vaccinations this year is certainly something we can see on the horizon, revenues are expected to jump by over 80% on any given quarter. This huge cash-flow is of course dependent on the free movement of people across the borders, so business leaders in Asian gambling will be looking on intently at how the situation develops.
Looking ahead and there are a number of key milestones that could certainly shape the course of events in the Asian casino sector over the coming months. In 2022, a license renewal round is looming. Sands China seeks to make a strategic sale of an equity stake to Chinese investors as a gesture of goodwill to Beijing. This act would be a mechanism for sharing some of the wealth being generated with the political leaders wielding so much power over the fate of private firms in the region.
Las Vegas Sands appears to be in the process of liquidating some of its assets in the west in order to fund more projects in Asia. On the Las Vegas strip, venues such as The Venetian and Palazzo have been touted as potential sales. With prices for both properties in excess of $1 billion each, the cash windfall resulting from any M&A activities here could be potentially huge.
Analysts expect Sands to continue to focus its efforts on high-return investments in Asia following the sale of any of these huge assets currently sitting on their balance sheet. The funds will either go directly to the acquisition of new properties in Asia or allocated back to their investors and potentially be used to underwrite new debt outlays for future projects.
Other Exciting Opportunities on the Horizon for Las Vegas Sands
Beyond Asia, there are plenty of other exciting investment opportunities on the horizon for this casino company. The United States will always play an integral role at the firm, and possible gaming venue construction projects have already been tabled to take place in New York and Texas before the death of Adelson.
The interim Chairman and CEO at the casino, Rob Goldstein, and Adelson’s son-in-law and CFO Patrick Durmont are both said to be fully onboard with further expansion plans in the United States. The region represents the absolute core of the business, and whilst Asian expansion is viewed as a highly-lucrative with massive upwards potential, solidifying their hold in North America is very much back to prudent business strategy for the management team at Las Vegas Sands.
But without the patriarchal guidance of Sheldon Adelson the business is likely to make two major changes to its operating strategy. This will be mainly impacted in sports gambling and online casinos – both of which Sheldon Adelson was largely opposed to, but the new management team has indicated they will like to be more involved with. Only last week Goldstein began holding executive meetings with leaders in the North American sports betting sector to establish an early break-in strategy for the casino.