Summary:
- LVS is facing increasing concerns about online gaming.
- Concerns are tied to its recent plan for a $6bn resort on Long Island, New York.
- CEO Rob Goldstein addressed related key challenges during the fourth-quarter earnings call.
While focused on its global growth, with emphasis on Macau and Singapore, the leading developer and operator of international, world-class integrated resorts, Las Vegas Sands, faces mounting concerns regarding potential competition from online gaming.
The concerns, which come amid its bold plans to build a $6 billion resort on New York’s Long Island, were recently voiced during the company’s fourth-quarter earnings call on Wednesday.
Then, chief executive officer Rob Goldstein took the opportunity to address a series of key issues surrounding the company’s future, including its expansion efforts and challenges related to online gaming legislation in the U.S.
The Rise of Online Gaming, a Potential Risk to the Investments’ Success
Goldstein spoke about Sands’s proposal to secure a gaming license for a new resort near the Nassau Coliseum in Uniondale, New York.
He was cautious in responding to questions about the potential impact of a new bill S2614 introduced in the state Senate that would legalize online casino gambling.
Since the giant’s investment plan for Long Island is undoubtedly substantial, the ongoing growth of online gaming is considered a potential risk for the company.
CEO Goldstein noted that while previous attempts to legalize online gaming in New York had failed, the growing trend in neighboring states like New Jersey, Pennsylvania, and Michigan made him wary of the future.
“I believe in New York, that it’s a very strong market”, Goldstein said, adding that “igaming seems inevitable” in all markets with land-based gaming and sports betting.
I think sometime during the construction phase you could be faced with an igaming competitor, and that dilutes the value of the product. That’s our conundrum.
The Fight’s Not Over in Texas
In Texas, Sands is also facing difficulties in pursuing the legalization of casino gaming. Sands funds the Texas Destination Resort Association, which has been running ads encouraging lawmakers to put the matter on the ballot as a constitutional amendment.
Goldstein did not provide new updates on the Texas situation but confirmed the ongoing battle for legalization.
Despite challenges in the U.S., Goldstein and chief operating officer Patrick Dumont remained optimistic about Sands’s growth prospects in Asia.
Sands reported net revenue of $2.9 billion for the fourth quarter, a 0.7% decrease from the previous year.
However, Goldstein expressed confidence in Macau’s long-term potential.
Gaming revenue in Macau grew 6% in the fourth quarter over 2023, and mass gaming revenue rose 5%. We believe the Chinese economy and the Macau market will grow, and gaming revenue should exceed $30 billion in 2025.
In Singapore, Sands saw positive results, with property-adjusted EBITDA reaching $537 million and mass gaming growing by 28%. Goldstein attributed these gains to Sands’s continued investments in the region and the growing tourism appeal of Singapore, supported by a calendar full of high-profile events.
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