End Of An Era: Las Vegas Sands Sells The Venetian, The Palazzo For $6.2 Billion

Today signifies the end of a period in Las Vegas. The name Sands will no longer be associated with Sin City.

Las Vegas Sands (LVS), one of the biggest casino operators, is figuratively “leaving town.” They declared this morning that they are selling all their Las Vegas enterprises. This transaction encompasses the real estate and operations of The Venetian, The Palazzo, and the Sands Expo and Convention Center.

The sale price amounted to an approximate $6.2 billion in total. However, the deal is still pending closure and requires regulatory approval, a process that typically takes some time. Las Vegas Sands, during an earnings call, stated that they expect the deal to be finalized in the first quarter of 2022.

What’s included in the deal?

Two companies surfaced with the intention to acquire the Venetian and its components.

Apollo Global Management, Inc. is acquiring the subsidiaries that possess the operating assets and liabilities of the LVS business for an estimated cash sum of $1.05 billion. This component of the agreement is contingent upon specific adjustments after the closing and includes $1.2 billion in seller financing.

Meanwhile, VICI Properties Inc. will acquire subsidiaries, which possess the real estate and related assets of The Venetian, for an estimated cash payment of $4.0 billion.

This deal heavily focuses on a name change. Las Vegas Sands will soon be known simply as Sands. The company is shedding the ‘Las Vegas’ portion of its name as swiftly as it disposed of all its Las Vegas assets.

Sands looking towards the future outside of Las Vegas

The company has taken a step forward with the sale of The Venetian, following the passing of its founder, Sheldon Adelson, last year.

From the Chairman and CEO of Las Vegas Sands, Robert Goldstein:

“The transformation of future casino development was driven by The Venetian and solidified Sheldon Adelson’s reputation as one of the most pivotal figures in the gaming and hospitality sector. With the announcement of The Venetian Resort’s sale, we honor Mr. Adelson’s legacy as we commence a new phase in the company’s history.”

Since last year, the company has contemplated selling its assets in Las Vegas. The proceeds from this sale will be utilized by LVS to reinvest in its properties in Asia and to probe into new casino markets and growth prospects such as online sports betting.

Goldstein elucidated the thought process behind the decision to sell the businesses where the company originally began:

The company is committed to expansion, spotting valuable prospects across various domains. Asia continues to be the mainstay of our organization, with our initiatives in Macao and Singapore commanding our focus. We are constantly seeking strategies to re-invest in our properties and their surrounding communities. There are also possible growth opportunities within the country, where we anticipate that a considerable capital investment would greatly benefit those areas and simultaneously generate high returns for the company.

While LVS has a plan for the future, it can’t be said that The Venetian and The Palazzo have the same at this moment.

The Venetian, The Palazzo, and Sands Expo Center have new owners

The ownership of The Venetian, The Palazzo, and Sands Expo Center will soon change hands. The real estate at 3355 South Las Vegas Boulevard is owned by VICI, a real estate investment trust. Furthermore, the casino, convention center, and other operations will be managed by funds overseen by one or more affiliates of Apollo, a capital investment firm.

An official operator for The Venetian casino has not been revealed yet. However, Caesars is speculated to be the potential operator for the luxury casino(s). VICI, the property owner, has connections with Caesars. Furthermore, the casino operator has an extensive history with Apollo.

Before this agreement, Caesars seemed uninterested in buying another Las Vegas property. On the latest earnings call of Caesars, CEO Tom Reeg made the following remarks about future deals:

“It’s improbable that we would purchase any significant assets currently operating domestically if markets such as New York and Texas legalize commercial casinos. We would definitely scrutinize whether it would be beneficial for us to participate in these markets.”

Should Caesars not become the operator of The Venetian, there are rumors of numerous potential casino operators showing interest in penetrating the Las Vegas market. Furthermore, one of the two casinos might serve as a gateway for a new sportsbook operator in Nevada.

Could Caesars take over operations?

After buying the rights to the venue from CG Technology, William Hill now runs the sportsbook at The Venetian. In a related development, Caesars has taken over William Hill, a transaction expected to be finalized in the following quarter.

The sportsbook at The Palazzo, Legasse’s Stadium, permanently shut down last year due to the COVID-19 pandemic. There has yet to be an announcement from LVS and William Hill regarding if, when, and how a sportsbook might reopen at The Palazzo.

After the deal is finalized, more details about future casino operations for The Venetian and The Palazzo should be revealed.