With Interesting Irony Las Vegas Sands Evaluates Entry into US Sports Wagering
- A surprise departure from ailing CEO Sheldon Adelson’s stance against online gambling
- No announcement yet who Sands partner may be in a potential expansion venture
- Reports remain of Sands sale due to continuing COVID-19 effects in LV & Macau casinos
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Perhaps taking a cue from the old catchphrase “if you can’t beat em join em”, according to reports from Bloomberg news sources, Las Vegas Sands has begun discussing options with potential partners to penetrate the US sports wagering industry.
Making this move so unusual and somewhat ironic is the major change in philosophy and message it sends involving the company’s founder and CEO Sheldon Adelson, who is currently on medical leave. It sets the stage for a major shift in the company’s strategy, according to people familiar with the situation.
Adelson has had a long, highly publicized history of opposing online betting, the core of US sports betting, It was Adelson that rallied strong political ties fighting the appeal of PASPA (the Professional and Amateur Sports Protection Act of 1992) before it was eventually overturned by the US Supreme Court in May 2018.
He, his attorneys, and lobbyists argued that online gambling not only violated federal law but would allow for moral breakdown, create potential illegal corruption in sports and damage the current US casino system.
Last Friday it was announced that Robert Goldstein, acting chief executive officer, is in the early stages of talks. Plans could involve using the Sands brands or the broader development of a betting platform by the company, according to sources who asked not to be identified because the discussions are private. Beyond the initial announcement and change in philosophy, the majority of the current interest remains to identify who the Sands partners in this new venture will be.
Akin to other recent expansion news involving companies pursuing sports wagering, shares of Las Vegas Sands rose as much as 2.8% before slightly declining.
Expecting New Online Gaming Deals Each Week
The not surprising aspect is learning of a new expansion or partnership venture in the sports wagering and online betting sector. It has become more of a headline we have come to read about each week.
Last Wednesday brought the stunning news of MGM Resorts International announcing an $11 billion offer for Entain Plc, parent of the Ladbrokes betting shops and other online wagering businesses. We are awaiting news regarding the adjustment of that offer as the original price was rejected by the company. That joined the continual rising stock price of industry leader DraftKings, which has partnered with several professional US sports teams while gaining a further national identity.
In November William Hill shareholders approved their acquisition from Caesar’s Entertainment. The UK sports betting operator was bought out by Caesar’s earlier in 2020 for $3.7 billion. Both parties expect the acquisition completed by March 2021.
Commenting on the flurry of acquisitions and takeovers in the market, Chris Grove, an analyst with Eilers & Krejcik Gaming LLC said:
There’s a real pressure to make sure you’re in a position to cash in on the pretty substantial thirst for online gambling. A lot of companies were caught by surprise by the kind of explosion it’s received.
The Bottom Line
The business of sports wagering is nothing completely new for the Sands Corporation with sportsbooks at upscale Las Vegas casinos including the Venetian and the Palazzo. They are managed by William Hill US, now partnered with Sands competitor Caesars Entertainment.
Again, the stunning aspect is knowing this deal must include “online wagering”, where Adelson’s previous opinions and millions spent to defeat it are omnipresent.
Market aspect and identity are also other key issues. The Sands name is only known in Nevada vs DraftKings or FanDuel. Many online-only operators have discovered ways to penetrate US states requiring a partner skin with a land-based operator.
The bottom line for this maneuver is the Sands, like all casino operators, have been suffering since March 2020 because of COVID-19. Those government-ordered restrictions are expected to be continued into 2021. Betting at the company’s land-based casinos in Macau, Singapore, and Las Vegas will remain well below pre-pandemic levels. Online wagering is seen as the only available option.
Recent reports have disclosed that Adelson has proposed selling the company’s Las Vegas resorts if he can obtain a $6 billion asking price. That funding could fuel investment for new markets, such as New York, where sports wagering is permitted, and online wagering now being proposed. Also, in Texas, although that is seen as a longer-term objective because the Lone Star state has limited casino gaming and does not currently allow sports wagering.
The next few months will likely bring confirmation news announcing the Sands Corporation’s plans including naming their partner in this potential venture. According to Bloomberg, Mr. Adelson is worth $33 billion dollars. As his largest private contributor, he has spent over $350 million to support President Trump during his recent re-election campaign.
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Larry Gibbs is both a seasoned journalist and a respected online gaming industry consultant. His wry commentary & sharp analysis have appeared in numerous top gaming and sports wagering publications. He has also served as Vice President of US Gaming Services, a marketing research organization with 15 years of experience in US online wagering. He has spoken at noted gaming industry conferences including G2E, GiGSE, and NCLGS.
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