- Sands believes online betting could dilute land-based opportunity set in New York
- Company is seeking third party to take over its bid
Las Vegas Sands (NYSE: LVS) may have shaken the gaming industry and New York City’s casino ambitions today when it announced it is abandoning plans to pursue a downstate gaming license there.
Long viewed as one of the leading contenders to procure one of the three permits Empire State regulators have yet to award, the Las Vegas-based company said it’s dropping out of the New York casino competition amid fears that if the state eventually allows internet casinos, that would dilute the economic advantages of land-based gaming venues.
As we have previously stated, the company remains concerned about the impact of potential legalization of iGaming on the overall market opportunity and project, said CEO Robert Goldstein on a conference call with analysts.
Sands was aiming for a $5 billion project in Nassau County at the site of the Nassau Coliseum. Goldstein added the company still believes that property is a premier choice for a casino hotel, noting Sands is in the process of identifying a third party that can essentially takeover of its bid and move forward on Long Island. The chief executive officer said such firms “would include those that may be able to address both land-based and digital markets in New York.”
Sands NYC Casino News not that Surprising
There’s no denying that news of Sands exiting the New York City casino race is significant, but it’s also not surprising. When the company delivered third-quarter results last October, Goldstein clearly said the iGaming risk was on the operator’s radar.
“I’ve always been the biggest advocate for New York and other jurisdictions,” he said at the time. “The only concern I have these days is the ongoing strength of online gambling. We can’t ignore what’s happening in New Jersey, in Pennsylvania, in Michigan.”
Further cementing the notion that Sands was accounting for internet casinos in its New York considerations is the company’s long-standing aversion to that form of wagering. The late Sheldon Adelson, whom Goldstein replaced as CEO, was stridently opposed to online betting and even when the online sports wagering boom started a few years ago, Sands barely nibbled at the space.
The move may be an act of prudence by the casino behemoth. Currently, New York doesn’t allow iGaming, but due to the state’s need for revenue, consensus wisdom indicates that it’s a matter of “when”, not “if” the state permits that form of betting.
NYC Casino Field Thins
Following the departure of Saks Fifth Avenue from the fray earlier this month, the field of competitors vying for New York City casino permits stands at 10, but that figure would drop to nine if Sands cannot find a suitable partner in Nassau County.
Even if that number remains at 10, it’s likely a positive for some bidders that Sands is exiting. Assuming speculation is accurate that MGM Resorts’ Empire City Casino in Yonkers and Resorts World New York in Queens are going to win two of the downstate licenses, potential beneficiaries of the Sands departure could include Caesars/SL Green, Hard Rock International/Steve Cohen, and Related Cos./Wynn Resorts.
Goldstein noted Sands sees buying back its stock as the preferred use of capital over the near-term. The company told investors today it’s increasing a $1.1 billion repurchase program to $2 billion.
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