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Las Vegas Sands is on the way to becoming just Sands.
The upcoming $ 6.25 billion sale of the Venetian, Palazzo, Sphere entertainment project and Sands Expo and Convention Center, announced in March, is expected to close later this year or early 2022.
The transaction ends the company’s presence on the Strip, which began in 1989 when the late Sheldon Adelson acquired the Rat Pack-era Sands Hotel for $ 110 million.
The deal doesn’t end the company’s interest in the US gaming market, but the outlook is minimal.
Chairman and CEO Rob Goldstein said last week that efforts to build an integrated resort in New York City have been “shut down” because certain key issues were not resolved. In Texas, lawmakers again rejected a Sands-backed casino game proposal during the most recent legislative term. The topic can only be raised there again in 2023.
But Florida offers new opportunities. According to the Tampa Bay Times, Sands is spending $ 17 million to fund a referendum in 2022 that could bring three non-tribal casinos to the state.
“In the US, that’s all we’re looking at right now,” Goldstein said.
The lack of a US presence worries Stifel Financial gaming analyst Steven Wieczynski, especially if Sands is serious about online gambling and sports betting. The company announced earlier this month that it had put together a team to explore a business-to-business entry point into the digital gaming world.
Sands, Wieczynski said, has a strong balance sheet with $ 6 billion in cash and another $ 6.25 billion from the Las Vegas transaction. He expects the company to return dividends to shareholders. However, he said clarity was needed on the company’s core markets in Macau and Singapore.
Wieczynski said the digital world might not be the best investment for Sands.
“What we don’t want Las Vegas Sands to be chasing this sports betting / iGaming euphoria that is going on right now,” Wieczynski told investors. “Given their lack of a domestic presence, we believe they are just overpaying for an opportunity that at the end of the day probably wouldn’t be all that relevant to their cash flow base.”
However, Goldstein is not deterred by the company’s late start in the online gaming business.
“It’s pretty slow to get there. But I think in three to five years you will see a really positive result, ”he said.
Sands’ main focus will be – and currently is – on resorts in Macau and Singapore. Goldstein said this on the company’s conference call in the second quarter.
Despite somewhat choppy news – pandemic travel restrictions continued to slow the recovery in Macau and the discovery of a COVID-19 cluster in Singapore forced a two-week closure of the Marina Bay Sands casino area – Goldstein and Sands President Patrick Dumont remain bullish on the two targets.
“The timing of a return to a more normal environment in Asia is uncertain,” said Goldstein. “But the outcome is not uncertain. It will happen, ”said Goldstein.
Sands made no changes to its plans to expand and renovate two key properties.
In Macau, the company is spending $ 1.35 billion to convert Sand Cotai Central into The Londoner, which is expected to be completed by the end of the year. A $ 3.3 billion expansion of Marina Bay Sands, which includes a 1,000-room all-suite hotel, sports and entertainment arena, and additional convention rooms, won’t be completed until 2025.
“We remain very committed to Singapore to hold our footprint and footprint,” said Goldstein. “Obviously, COVID threw a wrench, a big wrench, into this whole thing.”
On the call, Goldstein cut off discussions about using the proceeds from the sale of the Las Vegas property to fund renewed efforts in Japan. Sands stepped out of the bidding process in May 2020 after once vowing to spend $ 10 billion to $ 12 billion on a casino resort in Tokyo or Yokohama.
“We tried very hard. We left feeling that there was just too much uncertainty for us, ”said Goldstein. “We can always reconsider something due to changed circumstances, but at this point we are on the sidelines.”
A depiction of the downtown New Orleans skyline with the look of the Superdome with the Caesars logos in the foreground. (Courtesy photo of Caesars Entertainment)
The naming rights to Superdome come as Caesars renovates the New Orleans resort and launches sports betting
Caesars Entertainment is spending $ 325 million over the next several years to transform Harrah’s New Orleans into Caesar’s New Orleans. The plan is to give the resort near the French Quarter a second hotel tower, a redesigned interior and exterior, and new amenities.
Caesars also plans to launch sports betting in Louisiana in time for the start of the NFL and college football seasons.
So why not try to associate the company name with the largest sports facility in the country?
The Las Vegas-based casino company and the NFL’s New Orleans Saints officially announced a 20-year agreement on Monday that will brand the downtown stadium as Caesar’s Superdome.
The New Orleans Times-Picayune reported that the naming rights contract was worth $ 138 million, a price in line with other stadiums in medium-sized cities. But the number, according to the newspaper, is well below the naming rights for stadiums in major markets like Los Angeles and Houston.
The naming rights to Allegiant Stadium, home of the Las Vegas Raiders, were secured by Allegiant Air’s Las Vegas-based parent company for between $ 20 million and $ 25 million a year, the Las Vegas Review-Journal reported in 2019. Neither neither the raiders nor the airline announced the financial terms or the timeframe. After 20 years, $ 20 million a year would be $ 400 million.
The Superdome, which has been the home of Saints football since 1975, is expected to host the Super Bowl LIX in 2025. The stadium has played seven Super Bowls, a record for any US venue. In 2022, the Superdome will host the 2022 NCAA Men’s Final Four, the annual Sugar Bowl and college football playoff competitions.
In addition to its New Orleans casino, Caesars operates four other Louisiana casino resorts – Belle of Baton Rouge, Isle of Capri Lake Charles, Harrah’s Louisiana Downs in Bossier City, and Horseshoe Bossier City.
Caesars CEO Tom Reeg said the company plans to expand its presence across the state.
“We have had a close relationship with the New Orleans Saints for nearly two decades and we appreciate the opportunity to strengthen them and celebrate our commitment to the city, state and the entire Gulf Coast region,” Reeg said in a statement. “We understand that the Caesars Superdome is more than just an iconic venue, it is the symbol of a resilient and innovative community.”
Caesars Superdome, a partnership between the Saints, the state of Louisiana and the Superdome Commission, is currently undergoing a $ 450 million renovation that includes the addition of field-level suites behind the end zone.
Other interesting items:
Earning season in the second quarter starts this week with five casino operators and game-focused real estate investment trusts. Truist Securities gaming analyst Barry Jonas said the most interesting news could come from MGM Growth Properties, the gaming REIT 42 percent owned by MGM Resorts International. The REIT lost to Blackstone in its CityCenter acquisition earlier this month, but that could actually be positive for the company, Jonas said. “MGM Growth’s management now needs to do third-party deals outside of its only tenant, MGM, in order to grow.” However, Jonas also pointed out that MGM Resort’s interest in selling its stake in the REIT “has the potential to negatively impact its valuation.” if it comes to a secondary sale in the open market.
Chicago Mayor Lori Lightfoot said in April that it hopes companies that ultimately bid on a potential $ 1 billion casino resort in the country’s third largest metropolitan area will have Las Vegas as a return address. According to the Wall Street Journal, this is unlikely to be the case. Shortly after Chicago announced its request for quotation, MGM Resorts International said it would pass the bid for the project. The same goes for Wynn Resorts. Chicago-based Rush Street Gaming is still working to “evaluate” the opportunity while Hard Rock International, owned by the Seminole Indian Tribe, has no comments. “The challenge with Chicago is that the sun and moon and stars really have to be in tune for it to work,” Brendan Bussmann, partner at Global Market Advisors, told the newspaper.
Casino operator Bally’s Corp. announced second quarter earnings on Monday after the Rhode Island-based company secured funding for its proposed $ 2.7 billion acquisition of UK online gaming and gaming platform Gamesys Group Plc. Bally said the company’s “better than expected operational performance” does not require funding from real estate mutual fund Gaming and Leisure Properties, which has agreed to provide up to $ 500 million. GLPI is selling Bally’s Tropicana Las Vegas operation and has acquired the real estate for the company’s casinos in Colorado and Illinois. Bally’s recently acquired the MontBleu Resort in Lake Tahoe and renamed the hotel-casino Bally’s Lake Tahoe.
