Las Vegas Sands sells the iconic Venetian casino complex and its Sands convention and exhibition center for $ 6.25 million, retiring from gaming operations in the Las Vegas Strip after changing the nature of the casino business there and almost anywhere else.
The name of the Venetian, the expo center, as well as the Palazzo, the casino and luxury complex of Sands that is part of the same complex, will remain and the headquarters of the company will remain in Las Vegas.
But the company led by Sheldon Adelson until his death this year will effectively cease U.S. operations. Under Adelson, the company focused years ago in Asia, where revenue ended up surpassing even operations in the Las Vegas strip.
Under the two-part deal announced Wednesday, VICI Properties will buy the casino and resort and all associated assets at the Venetian Resort Las Vegas and the Sands Expo for $ 4 billion. And Apollo Global Management will acquire the Venetian’s operations for $ 2.2 billion.
The global pandemic spread to Las Vegas and closed the strip where Las Vegas Sands has been the largest operator for years. Sales growth faded last March as infections spread to the United States. 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 Las Vegas casino, which was a meeting place for Frank Sinatra’s Rat Pack, into an imposing Italian-inspired complex.
Adelson reformulated the target audience in Las Vegas, focusing on conventionalists and even families. He acknowledged that the real potential was not in the casino floor, as in the 1960s, but in the hotels, resorts and convention centers that surround them.
After an explosive growth in Las Vegas, Adelson turned his gaze to Asia. Sands expanded to Macau, the only place in China where casino gambling is legal, where Adelson directed his company to build land where there was none, accumulating sand to create the Cotai Peninsula. Operations in Asia quickly surpassed those in the United States
Sands said Wednesday that the company’s focus will remain in Asia.
“The Venetian changed the face of the future development of the casino and consolidated the legacy of Sheldon Adelson as one of the most influential people in the history of the gaming and hospitality industry,” said President and CEO Robert Goldstein . “As we announce the sale of The Venetian Resort, we pay tribute to Mr. Adelson’s legacy as we begin a new chapter in the history of this company. This company is focused on growth and we see significant opportunities on several fronts. Asia continues to be the backbone of this company and our developments in Macau and Singapore are the focus of our attention. ”
Some industry analysts also expect Sands to use the proceeds from the sale to more aggressively drive online gaming, something Adelson had once pressed against.
“Their efforts so far have been delayed and in order to get involved in the next big game, the company would probably have to buy in, and now it has a lot of money to do it,” wrote JPMorgan Greff analyst .
VICI will enter into a triple-net lease with Apollo for the Venetians. The lease will have a total initial annual rent of $ 250 million and an initial term of 30 years, with two 10-year tenant renewal options.
The Venetian, located on the Las Vegas Strip, has three towers of luxury hotels with games, entertainment, shops and restaurants. The complex includes more than 7,000 rooms with all suites, 225,000 square feet of play space and 2.3 million square feet of meeting space.
Travel-related companies, from airlines to hotels and resorts, are roaring again with the launch of a series of new vaccines.
Apollo partner Alex van Hoek said in a prepared statement that the deal “underscores our conviction for a strong recovery in Las Vegas, as vaccines open a reopening of leisure and travel in the United States and throughout the world”.
The sale is expected to close in the fourth quarter.