Las Vegas Sands of Time Running Out for Iconic Gambling Brand
Having flogged its iconic Nevada businesses to voracious New York-based venture capitalists Apollo Global Management for a mouth-watering US$6.25 billion (£5bn/€5.9bn), Las Vegas Sands may have kept its storied name but it may soon be rueing its pivot to China.
Posting its first ever financial quarter (Q1/2022) without US operations, the brand that was once synonymous with hip king casino gaming and entertainment has revealed a decidedly uncool 21 per cent plunge in net revenue, like-for-like, to US$943 million (£753.3m/€894.4m).
Las Vegas Sands’ operations in the gambling enclave of Macau, which is administered as a “Special Region” by the communist government in Beijing, continued to be hammered by China’s draconian response to the ongoing Covid-19 pandemic during the quarter.
While most countries have liberalised their anti-Covid measures, China, if anything, has doubled down on travel restrictions and quarantines.
The Sands corporation runs five mega casinos and resorts in the south-east Asian entrepôt: the Venetian Macau, the Parisian Macau, the Plaza Macao and Four Seasons Hotel, the Londoner Macao and Sands Macau.
Revenue for the first three months of the year in the enclave fell almost 25 per cent, compared to 2021.
Sands’ casino revenue in Macau totalled US$627 million (£501m/€595m), down 27.5 per cent, year-on-year. Mall net earnings dropped near-five per cent to US$149 million (£119m/€141.3m). Rooms remained steady at US$95 million (£76m/€90m).
Elsewhere, in South-east Asia, the corporation’s Marina Bay Sands property in Singapore recorded revenue of US$399 million (£318.7m/€378.4m) in the quarter.
Overall, the Las Vegas Sands group recorded a loss of some US$302 million in the quarter (£241.2m/€286.4m), US$206 million (£164.5/€195.4m) more than the loss in Q1 last year. After factoring in other financials, pre-tax loss was US$476 million (£380m/€451.5m).
Despite this Las Vegas Sands Chairman and CEO Robert Goldstein tried to put a positive spin on events, while conceding:
“Demand for our offerings from customers who have been able to visit remains robust, pandemic-related travel restrictions in both Macau and Singapore continue to limit visitation and hinder our current financial performance,” he said.
“[But] we remain confident in the recovery of travel and tourism spending across our markets.”
Digital Path to Paradise
It would appear that the corporation, based in Paradise, Nevada, is now looking to ameliorate poor land-based performance with a late push into iGaming.
Certainly, following its deal with Apollo, Las Vegas Sands has got the liquidity to “build a digital presence and explore multiple [Online] opportunities.”
“We’re really in a growth and investment stage,” reasoned the corporation’s President and Chief Operating Officer Patrick Dumont.
“It’s very early on, and we have something to talk about, we’ll definitely start discussing it. But at this point, it’s a very early stage. We’re building a team and looking forward to the future.”
With investment and operations in China looking increasingly problematic, many observers would argue that the switch to digital couldn’t come soon enough.
Either that or the proverbial “sands of time” will run their cruel course.
