Las Vegas Sands Ready to Invest Up to $12bn in Japan

  • LVS plans to invest up to $12 billion for an integrated resort
  • Sheldon Adelson health has improved
  • Sands to target a top-tier city for its Japanese expansion

Sheldon Adelson returned to Las Vegas Sands Q3, 2019 earnings calls, announcing plans to invest up to $12 billion in a future integrated resort project in Japan.

Las Vegas Sands Continues Probing IR Prospects

Las Vegas Sands (LVS) earnings call took place on Wednesday, October 23, with the company revealing plans to invest at least $10 billion in Japan’s upcoming integrated resort (IR) project. On the occasional, LVS Chairman and CEO Sheldon Adelson returned briefly from cancer treatment, starting the meeting on an upbeat note:

Let me begin by saying I feel good, I’m very happy to be here with Rob, Patrick and the team and I look forward to our discussion today.

Mr. Adelson was referring to COO Rob Goldstein and CFO Patrick Dumont. The company backed Mr. Adelson’s $10 billion plan, with Mr. Goldstein pitching in to suggest that LVS could potentially invest $12 billion.

However, he also cautioned that similar to any other investment, the company had to ask itself whether it was prudent and whether it could produce the necessary amount of cash.

Goldstein also called for a realistic assessment of the situation, calling to fellow executives to consider the possibility of such an investment in the first place:

“We’ve had those discussions and we’ve had them with the Japanese government. We have the balance sheet and the capability and the skill set to do it. The question is, can we get a return that the guy to my left [referring to Mr. Adelson] is going to endorse?”

He then concluded that $10 billion was the absolute minimum to make the project work and that anything below that amount would result in poor quality.

After Osaka IR Withdrawal, Tokyo and Yokohama to the Fore

In retrospect, LVS was the first company to withdraw from the Osaka IR project. However, the company didn’t give up on the prospect of an IR, but rather the location.

Caesars Entertainment, another Las Vegas giant, called it quits completely, re-focusing on its merger with Eldorado instead.

Speaking during the earnings call, Mr. Goldstein explained that LVS briefly considered the prospect of Hokkaido – but dismissed it almost as soon as he brought it up. The reason, he explained was that LVS was only interested in a top-tier city and nothing in-between.

Once again, he cautioned that while the company had a rooted culture for ‘writing big checks,’ this still didn’t really give Las Vegas Sands a free hand in allocating $10 billion or $12 billion on a mega project.

Adelson Back at the Helm Soon

Meanwhile, new details about Mr. Adelson’s health emerged. He had been treated from cancer, and the treatment had evidently taken a course for the better. Furthermore, Mr. Adelson is expected to return to his duties as part of LVS as soon as he completes his therapy. Adelson himself had this to say:

‘I deeply appreciate the well-wishes and everyone who took the time to reach out to me. It certainly means a lot.’

Now that prospects for LVS look good, Mr. Goldstein’s words must be kept in mind regarding a future investment in an integrated resort – it’s going to be a big number.

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