After the death of Las Vegas Sands founder Sheldon Adelson on Monday, a year before Sands China's gaming license expires, opportunities could open up for Chinese investors to acquire a stake in the firm, industry executives said.
Without Adelson at the helm, the company may be more willing to sell a stake to curry favor with China’s government, or suitors may take advantage of his absence to buy a degree of control without opposition, executives told Reuters.
Gaming licenses for Macau’s six casino operators, including Sands China, are set to expire in 2022, but the government has yet to detail the rebidding process. “This presents a window of opportunity for Chinese parties to come in and take a strategic stake in the company,” said Ben Lee, founder of Macau gaming consultancy IGamiX.
Having a Chinese partner would improve Sands China’s chance of a new concession, he said, particularly with the removal of Adelson’s link to U.S. President Donald Trump, who he bankrolled and had regular contact with during Trump’s anti-China term.
Las Vegas Sands earns the bulk of its revenue from Asian properties, including the Venetian and Parisian in Macau and Marina Bay Sands in Singapore. The casino operator is due to open a British-themed resort Londoner in Macau in February.
Any decision on a Chinese firm buying a meaningful stake in Sands China would not be made in Las Vegas or Macau, but by authorities in Beijing, said Matthew Ossolinski, chairman of Ossolinski Holdings, an investor in Las Vegas Sands since 2008. “Increased Chinese ownership in any of the large operators makes sense for political reasons and could be a net positive for existing shareholders,” he said.
Earlier this month, MGM China Holdings Ltd shareholder Snow Lake Capital urged MGM Resorts International to sell 20% of the Macau casino operator to a Chinese strategic partner to help secure its local casino license. In an open letter, Snow Lake said markets already reflected license renewal concern for U.S.-owned Macau operators through trading performance and valuation - citing the high profitability yet low valuation of market leader Sands China.
Adding a Chinese partner would improve Sands China’s license chances and also boost its marketing ability in mainland China, said Anthony Lawrance, managing director of consultancy Greater Bay Insight. “It would help for what comes next in Macau after the licenses are awarded: access to new land and opportunities in (the mainland city of) Hengqin.”