Casino operator Las Vegas Sands Corp (LVS) hopes a new tower, part of its planned US$3.3-billion expansion project for its Marina Bay Sands casino resort (pictured) in Singapore, will be “in operation” by “January 1, 2024”
So said Robert Goldstein, president and chief operating officer (COO) of the United States-based parent firm in commentary on the group’s second-quarter earnings call on Wednesday.
Las Vegas Sands announced its group-wide second quarter results after the stock market closed in New York on Wednesday. The Nevada-based casino operator reported a 71.6-percent jump in second quarter net profit.
George Tanasijevich, the president and chief executive of Marina Bay Sands Pte Ltd, the local unit, had in April said the expansion portion of the Singapore complex would not feature a casino.
But his boss Mr Goldstein noted in the call commentary that the group was already pressing ahead with changes to the existing mass-market casino floor at Marina Bay Sands.
“Our mass casino floor is going through renovation currently and we’ll open renovated by summer of 2020,” said the group COO.
That would be followed by launches for facilities for higher-segment players on levels two and three of the existing property through to the year 2021, added the executive.
He further stated: “Keep in mind we are adding additional slot machines late 2020; we’ll have another 400 roughly and the balance in 2021. So 500 [new] games on the floor in 2021.”
Mr Goldstein added, referring to electronic gaming machine takings: “The market does US$700, US$800 per unit per day; it’s pretty impactful.”
The Singaporean government said on April 3 that it had agreed to the expansion of the city-state’s two integrated casino resorts. In return for their investment – an aggregate of SGD9 billion (US$6.65 billion) – the respective operators would continue to hold a duopoly on casino gambling in Singapore through 2030, it added at the time.
Regarding the financing for the Singapore extension, a presentation released on Wednesday by the parent mentioned it was “conducting a process to raise a delayed-draw term loan under the existing Marina Bay Sands credit facility.”
The document added: “We expect total availability under the facility of approximately US$2.8 billion.”
It further stated: “We anticipate completing this process within the next three months, subject to market conditions.”
The presentation materials indicated a new tower at the extension would have circa 1,000 all-suite rooms; and what it termed a “sky roof with a swimming pool and other tourism attractions”. There would also be in the extension an arena “designed specifically” for live musical performances and seating for at least 15,000; additional space for meetings, including function rooms and exhibition halls; and luxury shops.
Las Vegas Sands gave an illustration of the possible drawdown timetable for the delay-draw bank loan, with a modest portion drawn between this year and the end of 2021, and the bulk of the money between 2022 and 2024.
“Draws would reimburse actual expansion development costs incurred,” said the document.
The parent is also seeking to amend and extend the existing Marina Bay Sands credit facility and “increase the size of the existing revolver [loan] by US$185 million,” stated the presentation.
Macau VIP sentiment
Wednesday’s conference call made reference to the mood among consumers regarding Macau VIP business, although didn’t mention by name the Suncity Group – one of the largest investors in VIP junket business in that market – and Chinese state-backed media allegations the brand had been involved in “online betting” in casino markets outside Macau.
Mr Goldstein stated in response to a question from an analyst on Macau VIP play, that the segment had faced challenges “with what’s happened in the last month or so. It’s hard to predict what the junket business ends up being. We’re hoping for a resurrection…”
He added: “It’s a low-margin business and it’s challenging… it’s been challenging structurally for Macau to compete if other jurisdictions do things that Macau doesn’t allow.”
That was understood to be a reference to so-called “proxy betting”. Macau’s casino regulator issued an instruction in May 2016 clarifying that operators should not accept or permit such business. Las Vegas Sands had said in 2014 that it would not permit such Macau business.
During the second quarter of 2019, the contribution of VIP gaming to profit at subsidiary Sands China Ltd fell by 2 percentage points, from 9 percent to 7 percent, the parent company said on Wednesday. Rolling volume in the VIP segment fell by about 11.8 percent compared to the corresponding period last year.
Four Seasons Tower Suites, Londoner Macao
Mr Goldstein additionally gave some update on Wednesday on the timetable for changes to the range and type of accommodation offered by the group in the Cotai market in Macau.
That was a reference to the Four Seasons Tower Suites Macao, a tower next to the Four Seasons Macao. The tower had originally been earmarked by the group for facilities including condominiums available for sale, but will now instead be solely upmarket hotel accommodation.
The COO said on the earnings call, referring first to a revamp of Sands Cotai Central as a London-themed resort: “We’re building 1,200 exceptional suites at The Londoner [Macao] and the Four Seasons and these are large, very large stunning suites of the highest quality…
“Some will open actually this fall throughout 2020. And these suites are laser focused on premium-mass customers at the highest level,” he added.
The firm’s Wednesday presentation mentioned there would be “290 new suites in the Four Seasons Tower Suites Macao by first quarter 2020”; and “370 new suites in The Londoner Tower Suites Macao in late 2020.”
The Londoner Macao would have “additional MICE [meetings, incentives, conferences and exhibitions space]; retail, entertainment and luxurious suite offerings upon completion of its planned opening in phases throughout 2020 and 2021,” added the presentation.
At a company briefing in Macau in May, the group had said The Londoner’s revamped casino facilities might have more gaming tables and slot machines than the existing Sands Cotai Central. It didn’t clarify at the time if that would be a rejig of existing inventory within the group’s Macau operation.
Mr Goldstein mentioned on the Wednesday call – in response to a question about Macau competition in VIP product – the firm would be opening what he termed “brand new salons” at “The Londoner and Four Seasons”.
Mr Goldstein gave some comment also on the well-being of Sheldon Adelson, the group’s founder, chairman and chief executive, who did not take part in Wednesday’s earnings call. Earlier this year it had been revealed that he had been treated for cancer.
The COO hinted the chairman might be back for the third-quarter call due later this year. Mr Goldstein also referred to Patrick Dumont, group executive vice president and chief financial officer and who is also a son-in-law of Mr Adelson and was also on Wednesday’s call with analysts.
Mr Goldstein stated: “We want everyone to know that Sheldon is doing fine. Patrick and I were there last week in Israel, and he’s in great spirits. We look forward to him rejoining our next conference call in October.”
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"The idea that VIP [in Macau] would revert to its previous levels, I think that it’s clearly foregone, it’s not going to happen. But I anticipate that … the premium-mass and mass will be stronger than it has ever been”
Chief executive of Wynn Resorts