End Of An Era: Las Vegas Sands Sells The Venetian, The Palazzo For $6.2 Billion

Today signifies the conclusion of an era in Las Vegas. The name Sands will no longer be associated with Sin City.

In a significant move, Las Vegas Sands (LVS), one of the biggest casino operators, has announced its exit from the city. The company revealed this morning that it has sold all its Las Vegas-based businesses. This includes the real estate and operations of The Venetian, The Palazzo, and the Sands Expo and Convention Center.

The sale price amounted to roughly $6.2 billion in total. The deal is still in the process of closing and needs regulatory approval, which typically takes some time. According to Las Vegas Sands during an earnings call, they expect the deal to close in the first quarter of 2022.

What’s included in the deal?

Two firms surfaced to take over the Venetian and its components.

Apollo Global Management, Inc. is buying the subsidiaries containing the operational assets and liabilities of the LVS business for around $1.05 billion in cash. This segment of the transaction is contingent on certain adjustments after the closing and involves $1.2 billion in seller financing.

Meanwhile, subsidiaries holding the real estate and real estate assets of The Venetian will be acquired by VICI Properties Inc. for an approximate cash amount of $4.0 billion.

This deal primarily involves a name change. Las Vegas Sands will soon be known simply as Sands, dropping the ‘Las Vegas’ as swiftly as they disposed of all their Las Vegas assets.

Sands looking towards the future outside of Las Vegas

The company has made progress with the sale of The Venetian, following the death of its founder Sheldon Adelson last year.

From the Chairman and CEO of Las Vegas Sands, Robert Goldstein:

The transformation of future casino development and the solidification of Sheldon Adelson’s legacy as a pivotal figure in the history of the gaming and hospitality industry was brought about by The Venetian. Today, as we declare the sale of The Venetian Resort, we honor Mr. Adelson’s legacy and simultaneously commence a fresh chapter in the history of our company.

Since last year, the company has been contemplating selling its Las Vegas assets. The proceeds from this transaction will be utilized by LVS to reinvest in its properties in Asia and to venture into new markets and growth prospects, such as online sports betting.

Goldstein elucidated the mentality behind selling the businesses from the company’s inception:

The company is growth-oriented and sees valuable prospects in numerous areas. Asia continues to be our mainstay, with our projects in Macao and Singapore grabbing our primary interest. We are always exploring strategies to reinvest in our properties and their respective communities. There are also promising development possibilities locally, where we anticipate that substantial capital investment will not only benefit those jurisdictions significantly but will also yield high returns for the company.

While LVS has a future plan, it cannot be said that The Venetian and The Palazzo have one at this moment.

The Venetian, The Palazzo, and Sands Expo Center have new owners

The ownership of The Venetian, The Palazzo, and Sands Expo Center is soon to change hands. The real estate at 3355 South Las Vegas Boulevard, where these buildings are located, is owned by VICI, a real estate investment trust. The operation of the casino, convention center, and other facilities will be managed by funds overseen by one or more affiliates of Apollo, a firm specializing in capital investment.

The specific operator for The Venetian casino has yet to be announced. However, it’s anticipated that Caesars will be the subject of speculation as the potential operator of the luxury casino(s). VICI, the property owner, is associated with Caesars. Moreover, the casino operator has an extensive history with Apollo.

Before this agreement, it seemed like Caesars was not interested in buying another property in Las Vegas. In the latest earnings call of Caesars, the CEO Tom Reeg made the following statement about future deals:

“I would deem it improbable that we would purchase anything substantial that is already operating domestically if markets such as New York and Texas legalize commercial casinos. We would undoubtedly scrutinize whether participating in those markets would be beneficial for us.”

Should Caesars not take over The Venetian, several other potential casino operators are rumored to be keen on entering the Las Vegas market. Furthermore, one of the two casinos may provide a new sportsbook operator with an avenue into the Nevada market.

Could Caesars take over operations?

After buying the rights to the venue from CG Technology, William Hill now runs the sportsbook at The Venetian. In a related development, Caesars is set to acquire William Hill, with the deal expected to be finalized in the next quarter.

Last year, due to the coronavirus pandemic, the sportsbook at The Palazzo, Legasse’s Stadium, permanently closed. LVS and William Hill have not yet revealed if, when, or how a sportsbook will resume operations at The Palazzo.

Information about future casino operations for The Venetian and The Palazzo should become more clear once the deal is finalized.