Sheldon Adelson wants to sell Vegas casinos; MGM Growth might be interested

Sheldon Adelson

Casino powerhouse Las Vegas Sands is exploring options for reducing its Las Vegas portfolio of resorts as it no longer deems these core to the business, especially in the light of recent global pandemic. Sands is working with an adviser to solicit interest for its Venetian, Palazzo and Sands Expo Convention Center properties.

It is expected that the company might get $6 billion or more for the three properties that are all connected along the Las Vegas Strip. The sale, if it happens, would mean Las Vegas Sands has completely exited Las Vegas and is focusing solely on its market in Asia. The company currently operates integrated resorts in Macau and Singapore. Crucially, these generated more than 85% of the company’s revenue last year, with Macau casinos accounting for 63% of the company’s $13.7 billion revenue in 2019.

It hasn’t been the global covid pandemic that prompted Las Vegas Sands to attempt to sell the Las Vegas properties, but it certainly pushed the company to make this decision to improve its performance. The company’s legendary CEO Sheldon Adelson said that the recovery in Asia has helped Sands improve its results during Q3 2020. There was a three-month closure of all Las Vegas casinos.

The money Sands would get from the sale would enable the company to fund further expansion into the highly lucrative Asian market. The operator has previously unveiled plans to spend $2.2 billion on expanding and upgrading its operations in Macau.

Real estate investment trust (REIT) MGM Growth Properties is interested in acquiring the Venetian – or a completely different big Las Vegas Strip resort – as long as it finds the right partner to run such a property.

The company’s CEO, James Stewart, said that they would definitely be interested in adding The Venetian or another Strip casino resort to their portfolio and that should the right opportunity present itself, this is “absolutely a deal that we would do.”

Also, there are other REITs that might be interested in owning the Venetian or another big Vegas casino. Executives at VICI Properties are also looking to add such a property to their portfolio. This is a perfect opportunity for these REITs to invest in a Vegas casino during difficult times and then reap the rewards when the market goes back up, and it makes perfect sense.

Recently, Las Vegas Sands Corp. has been recognized by the Dow Jones Sustainability Indices (DJSI) as for the first time it has been named to DJSI World, representing the top 10 per cent of the largest 2,500 companies in the S&P Global Broad Market Index based on long-term economic, environmental, social and governance factors. The company also earned repeat placement on DJSI North America, placing it in the top 20 per cent of North American sustainability performers.

Sands is the only US-based hospitality and gaming company to be included on DJSI World, as well as on DJSI North America.

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