Sands’ Sale of Pennsylvania Casino Partly Related to Japan IR Bid

Las Vegas Sands sale of Sands Bethlehem in Pennsylvania at the end of May was partially related to the firm’s intention to refocus its energies on Asia, with the IR licensing bid in Japan a key objective, according to some analysts.

“Long term, the hope is that Las Vegas Sands will win one of the gaming licenses in Japan, which could lead to the costliest resort ever built—as much as US$12 billion,” writes Travis Hoium in The Motley Fool, a multimedia financial services company.

Hoium notes that the prospect of a major Japan IR bid is causing many other firms as well to make sure that they have a pile of cash on hand for their Japan bids and are not overcommitted to other investments.

“Japan is a bit of a conundrum for gaming operators because they have to keep enough powder dry to be able to afford to build there. But keeping cash on the balance sheet isn’t a great use of capital in a low-interest-rate environment, so companies like Las Vegas Sands would rather increase dividends or buy back stock if they aren’t going to win a bid in Japan. But ultimately, if Japan can be as profitable an investment as Singapore was for Las Vegas Sands, it’ll be worth any financial sacrifice,” he writes.

Chairman and CEO Sheldon Adelson’s statement about the Sands Bethlehem sale gives credence to this line of analysis: “The sale represents an important milestone in our company’s long-term strategy and allows us to focus on what we do best—large-scale, tourism-enhancing integrated resort development and returning capital to shareholders. Whether it is through the development of The Londoner in Macao, expansion of our footprint at Marina Bay Sands in Singapore, or by aggressively pursuing a very promising opportunity in Osaka, Japan, we are focused on delivering projects that bring positive economic benefit to our host communities and provide strong returns for our shareholders.”

At the end of May, Las Vegas Sands sold its Bethlehem, Pennsylvania, property to Wind Creek Hospitality, an affiliate of the Poarch Band of Creek Indians of Alabama, for the price of about US$1.3 billion. (AGB Nippon)