The fortunes of the Las Vegas Sands Corporation have taken a significant hit with the news that casino magnate Sheldon Adelson’s casino empire, which also includes casinos in Macao and Singapore, is set to experience a major decline in its revenues. On Thursday, Las Vegas Sands announced that it would close its Las Vegas casinos after more than a century.
Adelson, who is worth an estimated $40 billion, invested heavily in recent years in Las Vegas hotels and other casino ventures. In addition to his Las Vegas casinos, Adelson has a variety of other gambling ventures including sportsbook operator the Westgate Supermarket and the Venetian Hotel and Casino in Las Vegas. While some analysts suggest that Adelson may simply be moving his gambling interests into new arenas such as Asia, others argue that he may not be willing to risk losing the appeal of his Las Vegas properties to a major downturn.
Adelson, in an interview with Bloomberg News, argued that the worldwide recession and a number of economic problems throughout the world over the last couple of years has affected the gaming industry. The worst of it, he said, was a drop in tourist spending in the U.S., the second largest contributor to the Sands Corporation’s bottom line. Adelson told Bloomberg that it was likely that the decline would continue for at least another year.
While it may seem unlikely that the Sands Casino will experience a large drop in revenues, the company faces other challenges that could further dampen its profit margin. For example, it is facing legal battles from the government of Nevada over the construction of a hotel on federally protected land.
As part of the effort to protect the land, the state is attempting to seize control of the Sands Casino from Adelson. In the lawsuit, Adelson has been charged with failing to follow Nevada law by issuing an official notice of intent to operate the casino on the property. He has also been charged with breach of contract for refusing to pay a fee to the government. In response to the charges, Adelson has said that he plans to build another casino in Macao, but is not currently considering whether he will attempt to take over the Las Vegas Sands Casino.
While it appears that the Las Vegas Sands Casino will soon experience a major decline in revenues, it should not be assumed that the decline is directly related to the ongoing legal issues. The Las Vegas Sands Corporation continues to enjoy a strong financial position because of its large deposits in its casinos, its wide variety of locations, the high level of visitor traffic and the ability to offer quality entertainment.