Did This Casino's Big Bet on Asia Just Go Bust?
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Las Vegas Sands sold its operating company behind The Venetian, The Palazzo, and the Sands Expo and Convention Convention Center to Apollo Global Management for $2.3 billion. It was left with its five resorts in Macao, China, which generated 65% of its revenue in the first quarter and 41% in adjusted property EBITDA. The Marina Bay Sands resort in Singapore accounted for the remainder of the company's revenue and profits.
In June, Macao casinos' gross gambling revenue was $817 million less than in May. It was the worst monthly showing so far this year and the lowest since Sept. 2020. The VIP gamblers many of the casino operators count on are leery of traveling to Macau.
China has cracked down on junket operators, middlemen who bring VIP gamblers in China to Macao's casinos. In 2013, there were 235 VIP gaming promoters, but the downturn in Macau casino activity has seen their numbers plummet to just 85 at the end of last year. Beijing has tightened its control over these junkets in a bid to stem the outflow of money from China.
Macao is the biggest gambling market in the world. Las Vegas Sands left Las Angeles in 2006. The city is recovering. Room rentals for the third and fourth quarter of 2021 are running 20% higher than in 2019. MGM Resorts is up 32% so far in 2021.
Las Vegas Sands is considering entering the Asian gambling market. It is also considering Texas and sports betting.
