Two months after Sheldon Adelson’s death, his signature Las Vegas casino has been sold. One of the Venetian’s new owners, Apollo Global Management, is responsible for the largest bankruptcy filing in casino industry history. Unlucky?
The Las Vegas Sands had been looking to sell its Strip properties since October. The rumored price tag was a hefty $6 billion. In this case, the sources were nearly perfect.
Apollo runs it twice
The Las Vegas Sands announced the sale of The Venetian Resort Las Vegas and the Sands Expo and Convention Center on Thursday. Two parties purchased the Strip assets for a total price of $6.25 billion. VICI Properties will pay $4 billion for the real estate assets. Meanwhile, Apollo Global Management will pay $2.25 billion for the properties’ operational and business assets.
This won’t be the first time the Venetian’s new owner takes on the casino industry. In 2006, Apollo and TPG Capital, bought Harrah’s Entertainment (later renamed Caesars). At the time, it was the fifth-largest leveraged buyout in history, requiring a boatload of debt. Unfortunately, the timing couldn’t have been worse.
By the time the deal closed, the US was in the depths of the 2007-08 financial crisis. Apollo had hoped to sell a few casinos to pay off some of the debt, but there were no buyers. The company shuttered casinos to reduce costs, but It wasn’t enough. In 2015, the casino chain filed for Chapter 11 bankruptcy protection.
Undaunted, Apollo is ready to give the casino sector another try. In December, the private equity firm acquired the Great Canadian Gaming Corp for $1.9 billion. Great Canadian operates roughly 25 casinos and racetracks. Apollo’s recent purchase of the Venetian expands its North American reach.
New Venetian, Drew owners bet on Vegas rebound
The Venetian’s new owners aren’t the only ones betting on the post-pandemic come. Last month, an affiliate of Koch Industries bought the stalled Drew Casino project in Las Vegas. Koch is partnering with Fontainebleau Development to purchase the project.
Fontainebleau once owned the property, but the project went bankrupt in 2009. Since then, it was bought by investment mogul Carl Icahn (2010) and later, by the Witkoff Group (2017), a NY real estate developer. The pandemic, however, put the project back into bankruptcy.
Meanwhile, with hospitalizations down and vaccination rates climbing, there is reason to believe the casino sector may finally rebound. At least that’s what Jake Francis, president of Koch Real Estate Investment thinks.
“We believe strongly in the Las Vegas market and see the property as a great opportunity to contribute to the long-term success and positive trajectory of this vibrant and innovative region.”
Las Vegas Sands, however, is looking beyond Las Vegas for its future investments. “This company is focused on growth, and we see meaningful opportunities on a variety of fronts,” Sands CEO Robert Goldstein said.
Along with its planned Asian expansion, Sands is looking for domestic opportunities. Late last year, Sands confirmed that it is looking at Texas for potential development.