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Las Vegas Sands is selling the iconic Venetian Casino and its Sands Expo and Convention Center for $ 6.25 billion, withdrawing from gambling operations on the Las Vegas Strip after changing the nature of casinos there and pretty much everywhere else.
The name of the Venetian, the exhibition center as well as the Palazzo, the casino and luxury resort of the Sands which is part of the same complex, will remain and the company headquarters will remain in Las Vegas.
But the company run by Sheldon Adelson until his death this year will effectively cease operations in the United States. Under Adelson, the company turned to Asia years ago, where revenues eventually exceeded even operations on the Las Vegas Strip.
As part of the two-part deal announced on Wednesday, VICI Properties will buy the casino and resort along with all assets associated with the Venetian Resort Las Vegas and the Sands Expo for $ 4 billion. And Apollo Global Management will acquire the operations of the Venetian for $ 2.25 billion.
The global pandemic has swept through Las Vegas, shutting down the Strip where Las Vegas Sands has been the largest operator for years. Sales growth faded last March as infections spread across the United States. The company recorded 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 that was once a meeting place of Frank Sinatra’s Rat Pack into an imposing Italian-inspired resort.
Adelson reframed the target audience in Vegas, focusing on conventioneers and even families. He recognized that the real potential did not lie in the casinos, as it was in the 1960s, but in the hotels, resorts and convention centers that surround them.
After explosive growth in Las Vegas, Adelson turned to Asia. Sands spread to Macau, the only place in China where casino gambling is legal, where Adelson ordered his company to build land where there was none, piling up sand to create the peninsula. from Cotai. Operations in Asia quickly overtook those in the United States
Sands said on Wednesday that Asia was the focus of the company.
“The Venetian changed the face of future casino development and solidified Sheldon Adelson’s legacy as one of the most influential people in the history of the gaming and hospitality industry,” said said Chairman and CEO Robert Goldstein. “As we announce the sale of the Venetian Resort, we pay tribute to Mr. Adelson’s legacy while starting a new chapter in this company’s history. This company is focused on growth and we see significant opportunities on a variety of fronts. Asia remains the backbone of this company and our developments in Macao and Singapore are at the center of our attention. ”
Some industry analysts also expect Sands to use the proceeds to get more aggressively into online gambling, which Adelson had previously lobbied against.
“So far, its efforts have lagged behind its peers, and to get involved in the next big thing in the game, the company would likely have to buy its entry, and now has some cash on hand for it. do it, ”wrote Joseph, analyst at JPMorgan. Greff.
VICI will enter into a triple net lease agreement with Apollo for the Venetian. The lease will have an initial total annual rent of $ 250 million and an initial term of 30 years, with two 10-year lease renewal options.
The Venetian, located on the Las Vegas Strip, has three luxury hotel towers with games, entertainment, shopping, and dining. The resort includes more than 7,000 suite rooms, 225,000 square feet of play space and 2.3 million square feet of meeting space.
Travel-related businesses, from airlines to hotels and resorts, are making a comeback with the deployment of a slew of new vaccines.
Apollo partner Alex van Hoek said in a prepared statement that the deal “underscores our belief in a strong recovery for Las Vegas as vaccines usher in a reopening of leisure and travel in the United States and the United States. the world”.
The sale is expected to close in the fourth quarter.
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