Las Vegas Sands Flips on iGaming After Adelson
Las Vegas Sands seems to be entering a new phase, a new post-Adelson age. A new CEO is in place, and the company is now considering online gaming opportunities.
Longtime Las Vegas Sands CEO and the one responsible for growing it into a multi-billion-dollar company, Sheldon Adelson, died on January 12. He suffered from cancer and succumbed to it at the age of 87.
Little more than one week later, the US Court of Appeals upheld a District Court decision overturning a Trump-era Justice Department decision to curb online gambling via a new interpretation of the 1961 Wire Act. That interpretation was something Adelson worked for years to make happen.
Days later, Las Vegas Sands named Robert Goldstein as the company’s new chairman and CEO. And in his first investor call, he specifically noted that the company is now exploring online gaming opportunities.
January 2021 was not a good month for Adelson or part of his legacy.
Adelson’s Money Mattered Until Recently
Adelson had long been a force in the United States against online gambling.
He used his wealth and influence to donate to political figures who would support his beliefs and wishes. There were several key ones that included Israeli relations, wealth tax reductions, land-based gambling freedoms, and the prohibition of online gambling.
It was his anti-igaming stance that drove some of his political contributions after Black Friday. Some of the benefactors of Adelson’s campaign contributions drafted and pushed bills like the Restoration of America’s Wire Act (RAWA). It was the billionaire’s wish to overturn the 2011 decision that relegated the Federal Wire Act to sports betting applications only. All efforts to pass such a bill failed, though he was able to influence the Department of Justice under the Trump Administration to muddy the Wire Act waters, virtually overturning the 2011 DOJ memo to prevent states from legalizing and regulating online casino games and poker.
Mudding the Wire Act waters, however, prompted states with lotteries and other online interests to the courts. The New Hampshire Lottery Commission and its platform provider for the lotto took the DOJ to court on behalf of a slew of states and companies. And they won. The US District Court ruled unequivocally for New Hampshire, setting aside the Justice Department’s Office of Legal Counsel decision. And just this month, a US Appeals Court upheld that decision.
With an entirely new administration now in power in America, including a new US Attorney General, the government is not likely to appeal the decision to the US Supreme Court.
If this ruling stands, the 2011 memo to apply the Wire Act only to sports betting will be, again, the prevailing decision on the matter.
Goldstein Takes Over
Just this week, Las Vegas Sands appointed Adelson’s successor. Robert Goldstein had served as LV Sands President and Chief Operating Officer until Adelson’s death, at which point he stepped in as Acting Chairman and CEO.
Goldstein had been with LV Sands since 1995, moving up in status through the years. The Board of Directors approved Goldstein’s appointment and notified him.
Within 48 hours, Goldstein had made news through an earnings call to report fourth quarter revenue. His promotion during an ongoing pandemic that saw revenues sink to desperate lows throughout 2020 was a tough one. He reported a 74% drop in revenue in 2020 to $3.61 billion. He will need to revive it, which he says will happen by popular demand.
Robert Goldstein, promoted on Tuesday to become the full-time CEO of Las Vegas Sands, outlines his plans for the company's future without Sheldon Adelson https://t.co/S7WHBb5Zc9 $LVS
— Bloomberg (@business) January 28, 2021
His statement regarding online gambling was also a newsmaker. Goldstein told analysts that Las Vegas Sands is already exploring its possible entry into the sports betting and igaming market.
Per Goldstein, Adelson “never questioned its viability,” referring to internet gaming. He had simply been concerned about ethics and the dangers to young people.
Goldstein’s take was simple. “I have very strong thoughts about this,” he said. “We just want to keep working toward our goals. It’s a very interesting business. The question is can we bring something to the table that can make a lot of money.”
Initial Efforts in Texas
In the last months of Adelson’s life, Texas news reports indicated that Adelson focused on the legalization of casinos in Texas. Not only did he donate about $4.5 million to House Republicans’ election campaigns in 2020, he hired eight lobbyists. The goal was to push lawmakers to legalize casino gambling, even if only along the coastal areas of the state.
Democratic Texas State Representative Joe Deshotel (not believed to be a recipient of Adelson’s campaign contributions) introduced a bill in November 2020. HJR26 seeks to authorize casino gaming in coastal areas and rework the state’s compact with the Kickapoo Traditional Tribe of Texas to allow them to conduct casino gambling.
The bill has not moved since its introduction on November 10, and no additional sponsors signed on.
Andy Abboud with the .@LasVegasSands told the .@HoustonChron that "Texas is considered the biggest plum still waiting to be out there in the history of hospitality and gaming." .@LasVegasSands considers Texas a top destination @GamblingComp https://t.co/hiEXzmtZ7n
]— Chris Sieroty (@sierotyfeatures) December 9, 2020
Doubling Down on Texas
The November report indicated that Adelson hired eight lobbyists. The latest report from the Texas Tribune, however, indicated that Las Vegas Sands now pays 51 lobbyists in Texas. The Texas Ethics Commission confirmed that number. And the Tribune estimated that Sands is spending between $2.3 million and $4.5 million on those lobbyists.
Those 51 people also spent three days at a retreat at the Venetian in Las Vegas just before the current legislative session began. And on that day they returned to Austin, Adelson died.
The mission continues, though. Las Vegas Sands Senior VP of Government Affairs Andy Abboud released a statement to that effect.
“The possibilities for expanding Texas’ tourism offerings are exciting, and we look forward to working with lawmakers this session to present the potential opportunities that exist for robust, long-term economic development and jobs for the state.”
Some say that the urgency of casino legislation subsided with recent news that Texas faces a budget shortfall of nearly $1 billion. The lobbyists, however, will likely make the case that casino development and tourism expansion is exactly what Texas needs to improve revenue potential going forward.
This comes as big out-of-state gambling companies (Las Vegas Sands, MGM, Caesars, Boyd) have loaded up with more than 60 lobbyists to work on the Texas Legislature
The Texas Constitution bars gambling expansion here, but gaming companies REALLY want in.
— Jeremy Wallace (@JeremySWallace) January 29, 2021
