In an interview with the Las Vegas Review-Journal, Las Vegas Sands (LVS) CEO Rob Goldstein has announced plans for the casino operator to develop a new integrated resort in a "major" Asian destination: Singapore.
Plans to develop a new integrated resort in the Asian market come as no surprise, with the company relying on success in the markets of Macau, Singapore and Korea since the sale of its Las Vegas Strip assets The Venetian and Palazzo.
Goldstein accredits the move to LVS' growing reliance on revenue from Asian gaming markets, particularly post-Covid-19.
He said: “Keep in mind that 90% of our cash flow emanates from Asia. People don’t understand our company. Is your company ending? No. The company made 8% of its EBITDA in Las Vegas and 92% out of Macao and Singapore in 2019. So, our businesses in Macau and Singapore are the backbone of what we are.”
And it seems Goldstein is ready to endorse the backbone of his business with notable investments. Commenting on LVS’ second Marina Bay Sands slated to begin construction in 2023, Goldstein told of a $1bn investment into rooms, food and beverage and the construction of amenities.
Building new integrated resorts in profitable markets is what LVS is about, Goldstein notes.
“We don’t plan to stray from the IR model unless the jurisdiction doesn’t want an IR. That’s how we see ourselves, as large-scale IR developers. That’s our bread and butter.”
Moreover, Goldstein argues it is impossible to ignore the role of Singapore as a feeder market. The Lion City is “back to a US-type trajectory” according to the Sands CEO.
He notes: “Demand is picking up. It’s opening up and they’ve done a terrific job. Singapore is extraordinary.”
Singapore Government passes gambling reform bills
The Parliament of Singapore has passed a bill first read on 14 February 2022 to reform gambling laws in the country.
The country’s Casino Regulatory Authority (CRA) will hence be known as the Gambling Regulatory Authority (GRA).
“Keep in mind that 90% of our cash flow emanates from Asia... our businesses in Macao and Singapore are the backbone of what we are” Rob Goldstein, Las Vegas Sands CEO
Under the new bill, the regulatory expertise of gambling has been consolidated under one department. Experience will be drawn from the previously separate CRA, Gambling Authority Unit and Ministry of Home Affairs.
As detailed in the reform bill, the GRA will now have the authority to issue fines to violators of a new Gambling Control Act and unilaterally renew, revoke, and distribute licences.
This streamlined, more concrete regulatory body may potentially be an attractive step for foreign investment — which can now chart courses for potential financing strategies through a regulatory lens of greater transparency.
It would appear this is good news for Las Vegas Sands’ integrated resort development plans.
The newly formed GRA will consist of 17 members, appointed to their position by the Minister of Home Affairs. Each member will be able to hold their position for up to three years.
Macau casino shares drop 10% following Covid restrictions in Guangdong
Hong Kong’s listed casino shares fell by some 10% following China’s announcement of a lockdown in the Guangdong province.
With travel now heavily advised against, it was inevitable the Hong Kong stock exchange detailed SJM as down 10% this week. Likewise, Sands China and Melco Resorts International fell by 9% each, and this figure may only get worse.
Chinese health officials have imposed a 7-to-14-day quarantine period on those entering the areas of Zhongshan, Shenzhen and Guangzhou, in the Guangdong province.
Director and analyst at AllianceBernstein, Vitaly Umansky, notes the impact on Macau’s gaming stock, with the Guangdong region representing the largest local feeder market of tourism for Macau.
Macau has now placed a travel ban on neighbouring regions, however, to stave off a Covid spike in its city.
However, if an upsurge in infections reaches Macau, it's undoubted the economic impact on the Las Vegas of Asia would inevitably worsen, as venues become forced to operate at reduced capacities — or even close.
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