Las Vegas Sands Going Digital with New Investment Arm

Posted on: July 12, 2021, 08:56h. 

Last updated on: July 12, 2021, 01:43h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Las Vegas Sands (NYSE:LVS) is making a long awaited foray into digital gaming, announcing today it’s creating an investment arm dedicated to that effort.

Las Vegas Sands
Las Vegas Sands CEO Rob Goldstein, pictured in an interview, above. The company is unveiling digital gaming plans. (Image: Bloomberg)

The unit will be led by Davis Catlin, who joins the gaming giant from Sands Capital Management.

That Virginia-based firm, which has no relation to the casino operator, “is an active, long-term investor in leading innovative businesses globally.” It had $77 billion in assets under management as of June 30. For the past decade, Catlin oversaw Sands Capital’s investments in public and private companies in digital gaming.

Digital gaming and other related offerings are still very much in the early stages of development, and we believe there is an outstanding opportunity for us to invest in the technologies being developed,” said LVS CEO Rob Goldstein in a statement.

The Las Vegas-based company it’s aiming to be a “strategic investor” in digital gaming on the businesses-to-business side of the industry.

Digital Long Time Coming for Las Vegas Sands

Thus far, the US online casino and sports wagering boom is one that Las Vegas Sands has sat out. The late Sheldon Adelson served as chairman and chief executive officer until his passing in January. He built the operator into the world’s largest publicly traded gaming company t by focusing on land-based casinos in Macau and Singapore and pioneering the meetings, incentives, convention and exhibition (MICE) integrated resort concept.

Along the way, LVS barely nibbled at sports betting, while Adelson was stridently opposed to internet casinos. He believed that form of gaming could lead to increased addiction and heavy losses for gamblers.

Rival operators, however, are embracing iGaming and online sports betting (OSB) in a significant fashion, and some analysts expect those markets will swell to $42 billion in North America alone. LVS did not mention specific regions in which it intends to focus its digital gaming efforts. But with $2.07 billion in cash on hand as of the end of the first quarter and $6.25 billion on the way from the sale of its Las Vegas assets, the company has the resources to be a major player in online gaming. To that end, Goldstein is taking a pragmatic approach.

“Just as our integrated resorts were not built in a day, by being patient and investing for the long-term, we believe these investments in digital gaming technology will deliver significant returns for the company and its shareholders,” he adds.

Opportunities Galore for LVS

It’s not yet clear what form Sands’ online investments will take. But analysts believe the rampant consolidation that’s been prominent in iGaming and OSB in recent years is still in its early innings, indicating that a well-heeled suitor such as LVS has plenty of options to consider if it’s looking for outright acquisitions.

In February, rumors surfaced that LVS was considering a deal for online casino firm 888 Holdings (OTC:EIHDF). But no new reports on that front emerged in recent months.

However, that may not be the type of deal Sands is looking for, as it says it wants to focus on business-to-business opportunities. That could be a practical idea, because the consumer-facing side of the internet gaming space is hyper-competitive, and forces operators to spend heavily on customer acquisition.