Las Vegas Sands is selling the iconic Venetian casino resort and its Sands Expo and Convention Center for $ 6.25 billion, withdrawing from gambling operations on the Las Vegas Strip after changing the cashier business there and almost everywhere else.
The name of the Venetian, the exhibition center as well as the Palazzo, the Sands’ luxury casino and resort that are part of the same complex will remain, and the company’s headquarters will remain in Las Vegas.
But the company led by Sheldon Adelson until his death this year will effectively halt US operations. Under Adelson, the company’s focus shifted to Asia years ago, where revenues ended up being even greater than operations on the Las Vegas Strip.
Under the two-part deal announced Wednesday, VICI Properties will buy the casino and resort and all assets associated with the Venetian Resort Las Vegas and the Sands Expo for $ 4 billion. And Apollo Global Management will acquire the Venetian operations for $ 2.25 billion.
The global pandemic lies along Las Vegas and closes the Strip where Las Vegas Sands has been the largest operator for years. Sales growth disappeared in March last year as infections spread in the US. The company posted a quarterly loss of nearly $ 300 million in January.
The sale comes just two months after Adelson’s death, which transformed the iconic Las Vegas casino, formerly a hangout of Frank Sinatra’s Rat Pack, into a large Italian-inspired complex.
Adelson classified the target audience in Vegas and focused on convention attendees and even families. He realized that the real potential was not on the casino floor, just like in the 1960s, but at the hotels, resorts and conference centers that surround it.
After an explosive growth in Las Vegas, Adelson turned his attention to Asia. Sands expanded to Macao, the only place in China where casino gambling is legal, where Adelson instructed his company to build land where there was none, and piled up sand to create the Cotai Peninsula. Operations in Asia quickly outgrew those in the US
Sands said Wednesday that the focus will remain in Asia.
“The Venetian has changed the face of future casino development and reaffirmed the legacy of Sheldon Adelson as one of the most influential people in the history of the gaming and hospitality industry,” said Robert Goldstein, chairman and CEO. ‘While announcing the sale of The Venetian Resort, we pay tribute to the legacy of Mr. Adelson as we begin a new chapter in the history of this company. This company is focused on growth, and we see significant opportunities in various fields. Asia remains the backbone of this company and our developments in Macao and Singapore are the center of our attention. ”
Some industry analysts also expect Sands to use the proceeds from the sale to engage in more aggressive online gambling, something Adelson once worked against.
“His efforts so far have left laggards behind, and to get the next big thing involved in the game, the company will probably have to start buying, and he now has a pot of money to do so,” writes JPMorgan analyst Joseph . Greff.
VICI will enter into a three-only lease agreement with Apollo for the Venetian. The lease has an initial total annual lease of $ 250 million and an initial term of 30 years, with two renewal options for ten years.
The Venetian, located on the Las Vegas Strip, has three luxury hotel towers with games, entertainment, shopping and dining. The resort has more than 7,000 suite rooms, 225,000 square feet of play space and 2.3 million square meeting space.
Travel-related companies, from airlines, to hotels and resorts, are roaring back with the deployment of a slew of new vaccines.
Apollo partner Alex van Hoek said in a prepared statement that the agreement “emphasizes our conviction in a strong recovery for Las Vegas, as vaccines usher in a reopening of recreation and travel in the United States and around the world.”
The sale is expected to close by the fourth quarter.