Las Vegas Sands (NYSE:LVS) is reportedly mulling getting into the booming sports wagering business. That potentially marks a move into online gaming, an area Chairman Sheldon Adelson has long voiced opposition against.
Earlier Friday, Bloomberg reported Sands acting CEO Rob Goldstein is in early discussions that could result in the largest gaming company by market capitalization finally arriving in the sports betting industry. Talks are believed to revolve around leveraging the iconic Sands brand or the company developing its own betting platform, according to unidentified sources cited by Bloomberg.
On Thursday, the Venetian operator issued a statement saying Adelson is taking a leave of absence to resume treatment for non-Hodgkin’s lymphoma. The 87-year-old previously funded efforts and groups, such as the Coalition to Stop Internet Gambling (CSIG), to halt the proliferation of internet gaming, arguing that web-based card games and slots can lead to substantial losses for gamblers and foster high levels of addiction.
Since the 2018 Supreme Court ruling on the Professional and Amateur Sports Protection Act (PAPSA), LVS stands as the only major domestic US casino operator without some online sports betting exposure. The company’s sports wagering offerings are confined to a William Hill sportsbook at the Venetian on the Las Vegas Strip and kiosks at the neighboring Palazzo.
‘Late to the Party’
LVS’s potential change of stance on sports wagering comes as rivals, such as Caesars Entertainment, MGM Resorts International, and even Wynn Resorts are increasingly prominent players in the fast-growing industry.
In terms of a potential online offering, LVS is certainly late to the party. In that sense, they may look to partner with an existing operator, perhaps via direct investment, rather than trying to play catch-up to the likes of FanDuel, BetMGM, and DraftKings,” said RoundHill Investments co-founder Will Hershey in an interview.
Often touted by analysts for having one of the strongest balance sheets among casino operators, and with a market capitalization of $44.42 billion, LVS has the resources to consider a sports betting acquisition. Cementing a deal to sell the Venetian, Palazzo, and Sands Convention Center on the Strip would bring in more cash, perhaps as much as $6 billion. But there’s currently no talk that the company is considering a takeover as a sports wagering entry.
Possible Pandemic Elixir
LVS owns five integrated resorts in Macau and Marina Bay Sands in Singapore, and those are the company’s two largest markets in terms of revenue and earnings before interest, taxes, depreciation and amortization (EBITDA).
Its US exposure is confined to the aforementioned Strip venues. But with rumors of sales of those assets intensifying, some industry observers believe that’s a commentary on Sin City’s recovery trajectory from the coronavirus pandemic.
Should Sands proceed with divesting those venues, it could use the cash to enter New York, where sports wagering is permitted, and Texas, though the Lone Star State is a longer-term objective because the state has limited casino gaming and doesn’t allow sports wagering.
“A combination of improved regulatory momentum in states like New York and increasing valuations for online operators has likely weighed on their decision to reconsider,” said Hershey. “The longer the pandemic rolls on and retail operations suffer, the more pressure there is on LVS to enter online.”
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