Apollo Agrees to Acquire Las Vegas Sands Strip Properties

Apollo Global Management is always working new deals. It’s the nature of the of the company. But it is becoming more and more integrated into the North American gambling industry.

Just before the end of 2020, Great Canadian Gaming Corporation’s shareholders approved a revised bid for Apollo Global Management to purchase the company. They planned to reject the first bid of C$39 per share but accepted the second offer of C$45 per share. With that, the deal went before regulators and governmental bodies for approvals. Both companies expect the deal to be completed by the end of the second quarter of 2021.

This week, Apollo set a deal into motion that will allow it to acquire the Venetian Resort and Sands Expo and Convention Center in Las Vegas.

Huge Biz Announcement

The news dropped on March 3, 2021. Apollo Global Management announced that funds managed by its affiliates – referred to as Apollo Funds – entered into a definitive agreement to acquire The Venetian Resort and Sands Expo and Convention Center Operating Company in Las Vegas from Las Vegas Sands Corporation.

The value of the transaction is $6.25 billion. The Venetian property itself had a price tag of $2.25 billion, which Apollo Funds will pay. VICI Properties will then purchase the land and real estate assets of the Venetian for $4 billion. When the deal is finalized, Apollo Funds will begin a triple net lease agreement with VICI for the Venetian.

All parties expect the deal to close by the fourth quarter of 2021.

Apollo Partner Alex van Hoek called the Venetian “America’s premier integrated resort, with an unrivaled set of amenities to serve guests across hospitality, meeting events, gaming, and entertainment.” He said this all positions the casino resort well for a strong recovery after the financial distress caused by the coronavirus pandemic. He also believes there is great potential for long-term growth.

“This investment also underscores our conviction in a strong recovery for Las Vegas,” van Hoek added, “as vaccines usher in a reopening of leisure and travel in the United States and across the world.”

VICI President and COO John Payne called the Venetian “one of the most coveted properties in Las Vegas and a premier destination for gaming, business, and leisure alike.” He also noted, “We look forward to what we expect will be a mutually beneficial and productive relationship with Apollo.”

The Venetian contains 7,092 hotel suites in its three towers, along with more than two million square feet of meeting space. And, of course, the gaming floor spans 1.4 million square feet.

The Sands is purely a convention space with 23 meeting rooms and 2069 square feet of meeting space. It hosted 53 conventions in 2019.

Sands Admired but in Recovery

No gambling company with a focus on land-based gambling and entertainment venues escaped the pandemic unscathed. Las Vegas Sands was no different.

At the end of January, LV Sands reported its fourth-quarter results from the end of 2020, and they showed a net revenue of $1.15 billion, down 67.3% year-on-year. The company’s operating loss was $211 million with a net loss of $376 million.

The full-year-operating loss totaled $1.69 billion, compared to operating income of $3.7 billion in the prior year.

Days later, LV Sands announced that it had – again – made the list of “World’s Most Admired Companies” by Fortune, which annually ranks the most “respected and reputable businesses.” Sands ranked highest overall and did well in social responsibility. It was the fifth straight appearance on the list but also the eighth appearance in the past nine years overall.

Losing a Founder

Sheldon Adelson was known as a casino mogul and billionaire, and Las Vegas Sands was his baby. He was an entrepreneur early in life and bought the historic Sands Hotel and Casino in Las Vegas in 1988 for $110 million. His vision transformed the property into the massive Venetian, an Italian-themed casino and resort that officially opened on the Las Vegas Strip in 1999. He also built the Sands Expo and Convention Center, which became a go-to space for conventions, meetings, and shows of all types.

Of course, Adelson expanded that company to build another casino in Pennsylvania and five massive resorts in Macau and one in Singapore.

According to media reports, Adelson was worth $35 billion and ranked among the top 50 richest Americans.

Adelson had been battling non-Hodgkins’ lymphoma, a form of cancer that had been diagnosed in 2019. Complications arose at before the end of 2020, and he died on January 12, 2021. He was 87. His wife, Dr. Miriam Adelson, announced his death.

More Than Leadership Change

Interestingly, Las Vegas Sands changed leadership, and it was only the beginning of announcements. Former Las Vegas Sands President and COO Robert Goldstein stepped in as Acting Chairman and CEO just weeks after Adelson’s death.

One of the very first comments from Goldstein pertained to an interest in Las Vegas Sands entering into the sports betting and online gaming market. That was in stark contrast to Adelson’s multi-faceted campaign to criminalize online gambling in the United States. He created a special lobbying organization and donated to numerous politicians who sponsored bills to try to fulfill Adelson’s wishes. But weeks after Adelson’s death, Goldstein told analysts that the company would explore the possibilities.

When questioned about the about-face move, Goldstein claimed that Adelson never questioned the “viability” of igaming. Rather, he only worried about its dangers to young people. (Of note, Adelson’s Las Vegas and Pennsylvania casinos received numerous citations through the years for serving underaged guests.)

The change in direction for Las Vegas Sands by Goldstein showed that the company would not necessarily honor Adelson’s longtime goals or wishes.

Selling the Flagship Properties

The Venetian and the Sands Expo were Adelson’s first and flagship properties. Their sale less than two months after Adelson’s death shocked some in the gambling industry.

Sands executives admitted that selling the properties is bittersweet but create new opportunities for the company to grow overall.

Goldstein said, “As we announce the sale of the Venetian Resort, we pay tribute to Mr. Adelson’s legacy while starting a new chapter in this company’s history. This company is focused on growth, and we see meaningful opportunities on a variety of fronts.”

He went on to say that the Asian properties are the backbone of Las Vegas Sands and deserve proper attention. However, he left open a window for more opportunities in the United States for a “significant capital investment.”

 

 

Jennifer Newell

Jennifer Newell

Jennifer Newell has been writing about poker and gambling since 2004. From her days in the WPT offices to covering summers of WSOP tournament action, she also followed gambling legislation to Washington D.C. and women-only poker to the Bahamas. Meanwhile, she lived in Los Angeles and Las Vegas for many years before moving back to her hometown of St. Louis, Missouri. Now, Jen travels less, writing about poker and online gambling from her home with her two dogs watching her every move. In her spare time, she follows politics, works on her never-finished novels, and learns Italian in the hopes of retiring to Italy someday.

If you want to know more, you can follow Jen on Twitter @WriterJen

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