Las Vegas: Sands withdraws from USA
For Las Vegas it is actually it is normal for casinos to be closed and new casinos opened or even built again and again. One piece of news, however, has a painful effect on casino fans: the famous casino company Sands wants to withdraw from Las Vegas. In this article we would like to explain where the journey should go.
Sands wants to sell three establishments
The owner of the Sands company,Sheldon Adelson, wants to sell all three locations. These are the Venetian Resort, the Palazzo and the famous Convention Center. Sands is hoping for an amount of six billion US dollars for all three locations. It remains to be seen whether this dream will come true.
The reasons why Sands wants to withdraw from the USA are interesting. According toBloomberg , Sands should focus on Macau. The company is hoping for an upswing there. Not only are the chances of high sales in the casino sector very good there – the hotels can also generate high profits.
Anyone who has followed the news knows that the number of infections in the USA is particularly high. This of course meant that there were not only fewer players in the casinos.In some cases the casinos had to close again after a brief opening. All operators of the local casinos were affected by this fact. In Macau, on the other hand, the situation is said to have defused, which is why Sands expects higher sales there.
Sale price could save Macau casinos
The negative situation in the US may be one of the main reasons why Sands is withdrawing there. According to internal facts, this cannot always be understood.The required or desired sales value is 12 times the profit generated by Sands in the US. After all, the calculated profit cannot be described as particularly low.
Owner Sheldon Adelson states that he wants to use the profit from the sale to maintain the existing locations in Macau.Before the coronavirus pandemic, Macau casinos accounted for 63 percent of Sands' revenues. Apparently, Sands would like to expand this profit and bring in the proceeds from the sales of the Las Vegas locations.
The interest in the Asian market did not arise yesterday. Sands has had the idea of expanding its position in Macau for the last year. To ensure that,Sands needs the high sale proceeds. This is the only way to compensate for the loss of sales that occurred during the corona pandemic. Macau saw sales plummet 93 percent in 2020 compared to last year.
Why does Sands want to invest in Macau? Sales don't seem to be increasing there. The opposite seems to be the case. Nevertheless,Sands is confident that the situation in Macau will ease and profits will skyrocket again. The company does not seem to accept this from the USA.
Macau: long-term competition to Las Vegas
The fact that Sands is interested in Macau is not without reason.Macau has been called the second El Dorado of gambling for years. Some pros even claim that Macau is the real casino land. After all, this country generates 44 billion euros. The largest share of this sum comes from the casino sector. Thusthis country is a serious competitor to Las Vegas. And: In Macau, entry regulations could recover faster than seems possible for the USA.
Nevertheless, Sands has also suffered a loss with the casinos in Macau. The company recovered only very slowly from this loss. The first positive results were achieved in the third quarter of this year.So the company suffered a loss of 731 million US dollars. The fact that Sands still decides in favor of Asia and not the USA is due to the hope that the overall situation in Macau will ease - in Las Vegas, however, not or more slowly.
Japan is the loser
Originally, Sands had planned to expand its activities not only in Macau but also in Japan.However, according to the latest news, Sands has withdrawn from Japan. One reason is the extremely short licenses that are issued for Japan. It's a shame that Sands has already invested quite a bit in the project in Japan. Sands had been bidding for an object that was valued at $10 billion. After this project would have required a construction period of 5 years, Sands turned away from this plan. Themain reason is the license of 10 years. If this license were not renewed, the costs could not be amortized.
In comparison:Macau and Singapore offer licenses between 20 and 30 years. There's a clear difference here that clearly reflects why Sands chose Macau. Not only Sands suffers from this decision, but also Japan. They were counting on the promise from Sands and wanted to boost the economy with new casinos. The country also suffered a setback because not only Sands but other large corporations withdrew.