Las Vegas Sands Chairman and CEO Rob Goldstein has reiterated his commitment to reinvesting in Asia, telling investors on Friday morning (Macau time) that a healthy chunk of proceeds from the sale of the Venetian in Las Vegas will be put towards Asian expansion.
The global casino giant announced last week that it had reached an agreement with two investment groups, Apollo Global Management, Inc and VICI Properties Inc, to sell off its entire Las Vegas portfolio for a combined price of US$6.25 billion.
The company’s motivations for doing so have since been roundly debated, with expansion into new markets across the United States – namely Texas, New York and the online gaming space – among the possible targets.
But speaking during J.P. Morgan’s Gaming, Lodging, Restaurant & Leisure Management Access Forum on Friday, Goldstein said the primary focus now is Asia via reinvestment in Macau and Singapore, plus expansion into new Asian markets should the opportunity arise.
“We are fans of Las Vegas and we will remain domiciled there, but we believe the world is changing and is changing in a way that benefits us,” Goldstein said.
“Leaving Las Vegas, it’s a smaller part of our business – 90% of our EBITDA resides in Asia. What we saw [with the Venetian Las Vegas sale] was a chance to take a very good return. It was a very healthy transaction for us and we believe it frees us up from the Las Vegas market, which albeit a very good market it is one that we felt was tough to grow a lot more EBITDA.”
Notably, Goldstein – although he didn’t detail exact locations – confirmed that the company was looking at new markets in Asia.
“We believe there may be more opportunities in other markets in Asia,” he said. “I know that we pulled out of Japan but there might be something else happening in Asia that is opportunistic.”
Marina Bay Sands in Singapore is already undergoing a US$3.3 billion expansion that includes development of a fourth hotel tower, with Goldstein revealing the company will also invest heavily in upgrading the original facilities.
“We still believe there is significant room for growth in Singapore, which will generate significant returns,” he said. “We’re happy to be investing US$3 billion to US$4 billion and we anticipate handsome returns of 20% and much more too.”
Macau can also expect further capital redeployment, despite the recent launch of Sands China’s US$2.2 billion transformation of Sands Cotai Central into The Londoner Macao.
“I believe the Macau government as part of this license renewal process will come to us and ask us to spend more dollars, large capital dollars, to grow our business and we would be delighted to spend as much as they want,” he said.
“We believe Macau is a big growth market for us, far beyond what we were doing previously, so we would love to deploy more capital in that market. I believe Singapore will come roaring back and Macau will as well.”
Goldstein did, however, reject suggestions that the sale of the Venetian may have been a strategy to reduce the company’s US presence in the eyes of Beijing ahead of the re-tendering for Macau gaming licenses. The concessions of Macau’s six current operators all expire in June 2022.
“We didn’t sell with that intent, that is not our goal,” Goldstein said.
“We don’t worry about Macau licensure. I think people who worry about it shouldn’t. I know it’s front and center, I’m not trying to be cavalier. We have spent a lot of time in Macau and have done it very thoughtfully. We have full confidence in our Macau licenses and we will be in Macau for many decades to come.
“This idea that we did it to free up from the US, or as someone wrote so that we can now proceed without regulatory scrutiny is not true. We are a US company, we pay our taxes here and reside here. We are going to be the same, highly regulated, very careful company we have always been and it wasn’t done to make the Chinese government say, ‘Gee whiz’.
“What we did do though was tell our friends in Macau and Singapore that we are eager to deploy capital and eager to expand because a dollar spent in Macau is more valuable to us than a dollar spent in Las Vegas in terms of return on investment.
“We got great feedback from the governments over there about the sale but it wasn’t meant to free us up from regulatory concerns or to make the Chinese Government more positive.
“We are content that we will be just fine in Macau.”