Las Vegas Sands is selling the iconic Venetian casino resort and its Sands Expo and Convention Center for $ 6.25 billion, withdrawing from gambling activities on the Las Vegas Strip after changing the nature of the casino business there and just about everywhere else.
The name of the Venetian, Exhibition Center and Palazzo, the Sands luxury casino and resort that is 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, in effect, discontinue US operations. Under Adelson, the company focused on Asia years ago, where sales eventually even surpassed operations on the Las Vegas Strip.
Under the two-part deal announced Wednesday, VICI Properties will purchase the casino and resort and all assets related to the Venetian Resort Las Vegas and the Sands Expo for $ 4 billion. And Apollo Global Management will acquire the Venetian’s operations for $ 2.25 billion.
The global pandemic expanded Las Vegas and closed off the Strip where Las Vegas Sands has been the largest operator for years. Sales growth faded last March as infections spread across the US. The company posted a quarterly loss of nearly $ 300 million in January.
The sale comes just two months after the death of Adelson, who transformed the landmark Las Vegas casino that was once a meeting place of Frank Sinatra’s Rat Pack into a towering Italian-inspired complex.
Adelson reformulated the Vegas audience, targeting convention attendees and even families. He recognized that the real potential was not in the casino floor, 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 his gaze to Asia. Sands expanded into Macao, the only place in China where casino gambling is legal, where Adelson commissioned his company to build land where there was none, piling up sand to create the Cotai Peninsula. The activities in Asia quickly outpaced those in the US.
Sands said on Wednesday that Asia will remain the company’s focus.
“The Venetian changed the face of future casino development and cemented Sheldon Adelson’s legacy as one of the most influential people in the history of the gaming and hospitality industry,” said Chairman and CEO Robert Goldstein. “As we announce the sale of The Venetian Resort, we are paying tribute to Mr. Adelson’s legacy as we begin a new chapter in the company’s history. This company is focused on growth and we see meaningful opportunities on a variety of fronts. Asia remains the backbone of this business and our developments in Macao and Singapore are at the center of our attention. ”
Some industry analysts also expect Sands will use the proceeds from the sale to bet more aggressively on online gambling, something Adelson once lobbied against.
“Its efforts have so far lagged behind peers, and to get involved in the next great game in gaming, the company would probably have to buy its way, and now has a pot of money to do that,” JPMorgan wrote. analyst Joseph Greff.
VICI will enter into a triple-net lease 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 10-year tenant renewal options.
Located on the Las Vegas Strip, The Venetian has three luxury hotel towers with gaming, entertainment, shopping and dining. The resort includes more than 7,000 suite-only rooms, 22,000 square feet of gaming space, and 2.3 million square feet of meeting space.
Travel-related businesses, from airlines to hotels and resorts, are roaring back with the introduction 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 around the world.”
The sale is expected to be completed in the fourth quarter.