Cash flow at Vegas-less Las Vegas Sands during the third quarter came in far above Wall Street‘s expectations, driven by “accelerating” business at Marina Bay Sands. As Credit Suisse analyst Ben Chaiken reported, “Macau is still largely uncertain pending the travel/COVID policies within China.” Still, he thinks a speedier-than-anticipated recovery in Singapore bodes well for Macao eventually. Once the government gets its act together, that is. He felt that at its current $36.50 a share, LVS stock is fairly priced, even a bargain when one looks to the future. For instance, when Shanghai denizens are allowed back into Macao (where they have represented 55% of visitation), favorable monetary demographics bode well for the premium mass-market segment, the new must-have customers in the enclave.
For the moment, however, Singapore is driving the bus, even with restraints in place on air travel. While business from China is still “a drag,” Chaiken sees VIP players from elsewhere in Asia dropping anchor in Marina Bay. Deutsche Bank‘s Carlo Santarelli deferred to noted stock analyst Don Henley, calling the 3Q22 results “the last worthless evening, that you’ll have to spend.” Signs of hope include resumption of international flights by China Airlines and the promulgation of a new Covid-19 vaccine within the PRC. He thinks that some concession renewals might even be announced next month, much sooner than expected. Sands executives themselves were rather tight-lipped on matters Macanese, perhaps hoping not to jinx anything. Indeed 3Q22 didn’t give Sands much joy there, with visitation to Macao down 91% and a comparable plunge in revenue.
Finally, as to New York City, the one U.S. plum that Sands covets, the company doesn’t expect anything to happen until sometime next year. As Santarelli elaborated, “We believe LVS will be amongst a long list of interested suitors for the one downstate license that we believe is truly up for grabs. Given lawsuits already mounting around the existing two VLT facilities which most believe will be converted to casino, it would not surprise us if the process for the 3rd license is drawn out, with several curveballs along the way, given the numerous complexities and varying constituents in the New York City area that will need to be satisfied.”
Speaking of New York, Sands could find itself aced by Caesars Entertainment. The latter is teaming with SL Green Realty to pitch a Caesars Palace in Times Square. While we think Sands’ business model would ultimately make for a better mousetrap, the glitz and brand power of the Caesars Palace name could dazzle Manhattan‘s casino pickers sufficiently for them to give the Roman Empire the nod.
Back in Las Vegas, failsino developer Jackie Robinson says he’s really, truly got the money for All-Net Arena (price tag $4.9 billion) this time. Of course, that’s what he said the last time. And the time before that. He also seems purposely vague on his new financing. Wake us when this thing actually gets built (and why would a basketball stadium need a retractable roof?) … Meanwhile Tilman Fertitta got approval for his Las Vegas Strip megaresort in what seems like record time. Why not? At least you can count on Tilman to deliver the goods.
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