Macau casino operator Sands China Ltd could not safely be awarded a fresh Macau casino concession by the city’s government until the outcome of multimillion U.S. dollar legal action against it, linked to the city’s 2001 tender process; and that might not happen in time for the proposed January 2023 start date for new concessions, implies a letter from Asian American Entertainment Corp (AAEC) to the Macau commission overseeing the fresh tender.
The letter – seen by GGRAsia – is signed by Taiwan businessman Marshall Hao Shi-sheng, who heads Asian American, and by his Macau-based lawyer, Jorge Menezes.
Sands China is a subsidiary of U.S.-based casino group Las Vegas Sands Corp (LVS).
The equivalent of US$11.92 billion in damages had been sought by Asian American, claiming the firm had been instrumental in the Las Vegas Sands side getting its initial 20-year Macau gaming licence at the turn of this century.
Nonetheless, in mid-May a request for leave to appeal against the judgement was filed by Asian American.
The letter to the tender commission, dated October 10, says that were Asian American to win its appeal, then Venetian Macau SA, which AAEC says is an applicant in the new tender process – as well as being an entity linked to Sands China – could be declared bankrupt, which would render it ineligible to be a Macau concession holder.
The letter states that the Las Vegas Sands group is “under a situation of high financial risk” because of the pending appeal. “If Venetian Macau SA becomes bankrupt it will be an extraordinary embarrassment for the Macau SAR,” a reference to Special Administrative Region, says the document.
The letter adds the current scenario could lead to a situation where a tender application having been launched, “the government awards a concession to Venetian Macau SA”, and “not long after” the entity “is declared bankrupt and cannot operate or build casinos and games of chance”.
That would “negatively affect the international reputation of Macau as an international gaming centre and its ambitions to diversify and attract foreign investment”.
Asian American suggests in its letter to the tender commission that Venetian Macau SA should provide a bank guarantee in the amount of US$11.92 billion to the commission. That would be in order to show the firm enjoys “adequate financial capacity” to be a Macau casino concessionaire, as required by the tender documents.
“This way, the Macau government can safely guarantee that if Venetian Macau SA loses the lawsuit filed by Asian American… [the company] will not go bankrupt”, states the letter.
If Venetian Macau SA cannot provide such a bank guarantee to the tender commission, it should be disqualified from the tender process, argues Asian American.
The letter does not state whether the Asian American side would be willing to drop its Macau appeal process in return for some form of compensation from the Las Vegas Sands side.
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