In March of last year, Las Vegas Sands (currently known as Sands) proclaimed the sale of The Venetian, The Palazzo, and the Sands Expo & Convention Center for a total of $6.2 billion.
Almost a year later, the sale of the real estate to VICI and the operations to Apollo Global Management (Apollo) has been finalized.
“Apollo Partner and Co-Head of Private Equity, David Sambur, expressed his excitement about finalizing the purchase of The Venetian, a top-tier Las Vegas resort supported by an exceptional team,”
He went on to say, “In the past year, our enthusiasm for the revival and future prospects of Las Vegas, and The Venetian in particular, has only increased. We are eager to invest in its unparalleled range of guest amenities and experiences. Sheldon Adelson, who built The Venetian over twenty years ago, was a real visionary. We are excited to ensure its continued success in the forthcoming chapter.”
Currently, The Venetian boasts three luxury hotel towers comprising over 7,000 all-suite rooms. Its casino provides 225,000 square feet of gaming space.
The Venetian has a total convention and meeting space of 2.3 million square feet.
Madison Square Garden Entertainment is currently constructing the MSG Sphere across the street behind the casino. Upon completion, this new entertainment venue will be directly connected to The Venetian through a pedestrian bridge.
Apollo is not just a casino operator, but also an investment company akin to Blackstone, which rejuvenated Cosmopolitan. Apollo intends to explore new ways to generate higher revenue than the previous owner of The Venetian.
Plans for the Venetian are vague for now
Apollo hasn’t completely revealed its intentions for The Venetian yet. During their discussions with the Nevada Gaming Control and its board, representatives did not make their presentation public.
A nebulous conversation about possibilities for The Venetian took place, but nothing definitive. Now that Apollo has operational control, it can scrutinize the property and its financial records to fully investigate potential new sources of income.
The hotel section of the property could undergo the most significant change.
In its hearing with the Nevada Gaming Control Board (NGCB), Apollo discussed several methods they are considering to increase revenue.
Ideas discussed included enhancing the options for food, beverages, and entertainment. There were also considerations about adding more value to the Grazie Rewards players club.
Another potential change could stem from Apollo considering the addition of hotel rooms. The company plans to investigate the completion of the partially built “St. Regis” tower located between The Venetian and The Palazzo.
The brand St. Regis is currently serving as a placeholder and is unlikely to be the actual name of the tower. The company has also indicated that they are considering different options for new rooms, although they did not mention any possible locations.
New way of selling Las Vegas casinos
Sales in Las Vegas casinos have changed over time. The majority of casino sales on the Vegas Strip have been purchased by multiple companies.
Over the past few years, the trend of combining or splitting casino sales has dominated Las Vegas. This trend involves casino operators and real estate companies collaborating to purchase and run properties. As prices escalate in Las Vegas, especially on the Vegas Strip, this trend is expected to persist.
Most casino operators simply find it too costly to afford both the real estate and operations of a property.
Conversely, companies can monetize their investments without surrendering their business by selling operations and real estate separately. Over the past few years, numerous Las Vegas casino operators have been observed selling off their land to generate cash.
Understanding the workings of a casino’s sales is useful, even though remembering the casino operator is more crucial. The nature of the deals could potentially determine the future of a casino.
MGM And Caesars Lead The Way In Split Casino Deals
It’s unsurprising that in this new form of casino sale, the two biggest casino operators on the Vegas Strip are taking the lead.
In 2015, a real estate company called MGM Growth Partners was established by MGM Resorts. This company now owns a significant portion of the real estate for MGM Resorts properties nationwide.
MGM Resorts has not only sold its real estate to MGM Growth Partners but also partnered with other real estate companies including Blackstone.
For instance, the operations of Bellagio are owned by MGM Resorts while the real estate is owned by Blackstone. When MGM sold the real estate, it did not have any impact on the visitors at Bellagio.
MGM Resorts sold its real estate investment trust (REIT) last year to increase revenue amid a sluggish casino business.
VICI, originally the real estate division of Caesars, was later spun off to become an independent company. In the previous year, it acquired MGM Growth Partners for a whopping $17.2 billion. Upon the finalization of this sale later in the year, VICI will hold the majority share of real estate on the Vegas Strip.
Here are a few recent sales of Las Vegas casinos that were divided into real estate and operations.
- Apollo bought operations from The Venetian, while VICI purchased its real estate.
- MGM Resorts bought operations from Cosmopolitan, and Blackstone purchased their real estate.
- Operations of The Mirage have been sold to Hard Rock, while the real estate is owned by Blackstone.
- Bally’s Corp purchased operations from Tropicana, while the real estate is owned by Gaming & Leisure Properties Inc. (GLPI).
The sale of the Venetian has been approved first. This summer, MGM Resorts anticipates the official sale of the Cosmopolitan.
Most casino guests are familiar with the companies that operate the casinos. Essentially, this is all that most casino guests need to understand. This aspect of the property significantly influences the overall casino experience.
Operating gaming, hotel rooms, shows, restaurants, bars, spas, and so on, are the responsibilities of casino operators. These aspects are crucial when visiting a Las Vegas casino.
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