Las Vegas Sands CEO praises China as Macau license is renewed


Skift take

Macau is a hugely important gaming market for Las Vegas Sands, and the company’s third-quarter earnings call was a giant love party for Chinese gaming regulators. What else are business leaders going to do other than flirt with the people in charge of renewing their gaming licenses?

Cameron Sperance

Now is apparently not the time for Las Vegas Sands executives to start saying what they don’t like about their biggest gaming market.

Las Vegas Sands CEO Robert Goldstein and other members of the company’s C-suite spent most of the company’s third-quarter earnings call on Wednesday explaining why they aren’t concerned about the plan of Chinese gambling regulators. increase scrutiny on Macau gaming operators. Instead, they have repeatedly described the regulators there as “very reasonable, very thoughtful and very fair.”

The call to investors was Las Vegas Sands first since the company’s shares were dumped last month, with regulators considering a wave of new surveillance measures ahead of next year’s license renewals in Macau.

All Macau casino operators are required to re-bid for their licenses, as they expire in June 2022. When asked if he could even consider the worst-case scenario where Las Vegas Sands does not get renewal license, Goldstein quickly rejected the idea. .

“I don’t. I don’t see a chance,” he said. “I think the government recognizes that we have been a good licensee.”

Administrative region of China, Macau is China’s designated gaming market.

Las Vegas Sands reported a net loss of $ 368 million for the third quarter, an improvement from the loss of $ 565 million recorded in the same three months last year. But the company is still struggling this year under the continued grip of the pandemic: the company lost $ 838 million in the first nine months of 2021.

Business executives didn’t spend much time on the numbers, instead focusing on analysts’ questions. A large majority of the questions revolved around the company’s perspective on its future in Macau.

Las Vegas Sands earlier this year planned to sell its Venetian Resort Las Vegas and the Sands Expo and Convention Center for $ 6.25 billion. The plan was to leave the city of the same name and focus its growth on Asian markets like Macau and Singapore.

The company’s planned growth in the region was turned upside down last month when Lei Wai Nong, Macau’s economy and finance secretary, announced that the government would step up its oversight of the casino industry. Operators of US casinos in the region like Sands, Wynn Resorts and MGM Resorts International have lost a combined valuation of $ 4 billion in the wake of the news. Sands China shares fell 28%.

But Sands’ management team reiterated their confidence that the company would do very well during the license renewal process as well as the surveillance exam in Macau.

Part of that optimism stems from the fact that Las Vegas Sands is a major employer in the region and has so far invested $ 15 billion in the development of casino complexes. The company also has more hotel rooms in the region than any other operator.

“We remain confident that the process will work,” Goldstein said. “We have two decades of history with this government, and it has been a very good two decades.

Until the scepter of increased regulation hovered over our heads, Las Vegas Sands’ decision to allocate more resources to Asia seemed like a smart move. The company generated $ 8.8 billion in revenue from its Macau properties in 2019, compared to $ 1.8 billion in Las Vegas, according to filings with the U.S. Securities and Exchange Commission.

It doesn’t appear that the last month of regulatory uncertainty has caused the Las Vegas Sands team members to change their minds about Macau and its development potential.

Executives on Wednesday cited the company’s Londoner Macau – a $ 2.2 billion UK-themed resort with replicas of the Houses of Parliament, Big Ben and 600 suites, including 14 designed by the star of football David Beckham – and Four Seasons Macau as future growth engines.

“We look forward to reinvesting in Macau,” Goldstein said. “We assume the process will be fair and equal.”

Macau and Singapore, another vital Asian gambling market for Las Vegas Sands, struggled during the pandemic due to tighter travel restrictions than Las Vegas. Singapore is just starting to ease restrictions on international travelers. Company executives expect a similar wave of demand for pent-up gambling to hit Singapore and Macau, as it does in Las Vegas.

“Anyone who doesn’t think Singapore is going to come back with a vengeance is wrong, and the same is true for Macau,” Goldstein said.

But there was a crack in confidence in China during Wednesday’s investor call. Singapore typically relies on travelers from China to fill hotel rooms and the game room of a casino like the Marina Bay Sands. But China’s borders remain largely closed to inbound and outbound international travel.

Goldstein has tried to play down reliance on Chinese companies at the company’s Singapore hotel complex, saying Las Vegas Sands can still make up to $ 1.5 billion “without Chinese production” and instead travelers from other Asian markets such as South Korea, Malaysia and Japan.

“Obviously, part of our business depends on access to the Chinese market, but it is not [entirely] dependent, ”he added.


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