Las Vegas Sands May Have a Longer Road to Recovery Than Expected
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The gambling industry is having an uneven recovery. The U.S. market seems to be doing best with entertainment travelers coming back. But the lucrative corporate customers who have long driven mid-week revenue have been absent. Las Vegas Sands is selling its Las. Vegas properties to affiliates of Apollo Global Management for $6.25 billion. Macao and Singapore continue to struggle all around with revenue down over 50% from pre-pandemic levels.
The COVID-19 pandemic in Macao has affected gambling revenue. The fourth quarter of 2019 saw a dramatic drop of 87.8%. It could be the rest of the year before we see a meaningful recovery.
Las Vegas Sands is focusing on Macao and Singapore after the sale of its Las Vegas properties. Management has indicated that it's eyeing opportunities in Asia and the U.S. and has an interest in online gambling. The good opportunities have already been taken and there are few opportunities left for Las Las Sands to invest in growth. The company has the biggest market share in the two biggest gambling markets (Macao & Singapore) and backed out of bidding in Japan.
Las Vegas Sands is no longer a growth stock. Investors should look for companies with upside in online gambling. Las Vegas Sates is not a great buy here.
