(Bloomberg) -- Las Vegas Sands Corp. has had discussions with potential partners in the fast-growing field of sports betting, setting the stage for a major shift in the company’s strategy, according to people familiar with the situation.
Robert Goldstein, acting chief executive officer, is in the early stages of talks, but plans could involve using the Sands brands or the broader development of a betting platform by the company, said the people, who asked not be identified because the discussions are private.
The company announced this week that its founder and longtime CEO, Sheldon Adelson, is taking medical leave. Creating a sports betting platform may mean embracing online wagering -- something Adelson has previously opposed. The billionaire has lobbied to prevent its legalization at the local and national level, based on moral grounds. Adelson has said he believes online games such as virtual slot machines make it too easy for patrons to lose money.
Shares of Las Vegas Sands rose as much as 2.8% on the news before retreating.
Sands is the world’s largest casino company, but it’s the only major U.S.-based player not to develop some kind of sports-betting strategy. The market has been growing rapidly since the U.S. Supreme Court said in 2018 that states beyond Nevada could introduce such wagering if they choose.
Nineteen states now offer sports betting and six more have approved it and are awaiting implementation, according to the American Gaming Association, a trade group. The market is expected to explode to as much as $10 billion by 2025 from about $1.6 billion last year, the consulting firm Vixio GamblingCompliance estimates.
Deal Frenzy
The casino industry has seen a frenzy of deal-making around sports wagers and online betting, driven in part by the surging stock price of DraftKings Inc., an industry leader. Just this week, MGM Resorts International announced an $11 billion offer for Entain Plc, parent of the Ladbrokes betting shops and other online wagering businesses.
“There’s a real pressure to make sure you’re in position to cash in on the pretty substantial thirst for online gambling,” said Chris Grove, an analyst at Eilers & Krejcik Gaming LLC. “A lot of companies were caught by surprise by the kind of explosion it’s received.”
Sands has long offered a sportsbook in its flagship Venetian resort in Las Vegas, but that business was outsourced to Cantor Gaming, now a part of William Hill Plc, which is being acquired by Caesars Entertainment Inc.
While sports betting has been growing rapidly, other forms of online betting have been as well, and those games are more profitable than sports wagers alone.
Adelson, 87, has been receiving treatment for non-Hodgkin’s lymphoma.
Sands, like all casino operators, has been struggling to cope with a steep drop in business due to the global coronavirus pandemic. Betting at the company’s casinos in Macau, Singapore and Las Vegas remains well below pre-pandemic levels. Online wagering is seen as a way for land-based casino operators to diversify.
Adelson has also proposed selling the company’s Las Vegas resorts if he can get the $6 billion price he’s looking for. That money could be reinvested in new markets, such as New York or Texas, if those states allow expanded casino opportunities, or in the company’s existing markets in Asia, which make up the bulk of Sands’ revenue.
(Updates with market reaction in fourth paragraph.)
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