Gaming Interests Vary Between Las Vegas Sands, Wynn Resorts And Boyd Gaming

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Thursday, July 31st, 2014 | Written by Charles Washington

Las Vegas Sands and Wynn Resorts may be at the forefront of the casino industry with their chain of integrated casino resorts spread out all across the globe, but the two gambling empires are not about to sit back and watch their fortunes diluted by easy access to online gambling sites allowing people to play online from the comfort of their own homes. The two high end hotel and casino firms’ stance is in stark contrast to that of other industry rival, Boyd Gaming Corp, which has chosen instead to concentrate on the US market and embrace online gambling as a valuable source of extra gambling revenues.

Adelson’s anti-online gaming crusade

The online poker industry has a formidable opponent in the guise of Sheldon Adelson, the nation’s 10th richest person with an estimated fortune worth $36.8 billion. The Las Vegas Sands Chairman and CEO sees iGaming as a huge threat to the vast empire he has worked so hard to build and over the year’s the 80 year-old billionaire has spent million of dollars lobbying to stop iGaming legalization. Taking what many see as a hypocritical stance on the issue, Adelson said:

“I am in favor of gambling. But I am not in favor of exploiting the world’s most vulnerable people.”

Las Vegas Sands versus China online gaming firms

Despite its strong presence in the US market, Las Vegas Sands also has a strong exposure to China through its subsidiary Sands China Ltd. Up until recently, however, Adelson’s lobbying efforts had primarily been directed at the American gambling market, but in a twist Las Vegas Sands Corp has now decided to go after a number of mainland Chinese online gaming companies (www.368.com) which he says have used the company’s likeness to fool players into believing they are gambling at an official website of Las Vegas Sands.

Interestingly, many of these online sites are also accessible to US residents meaning the sites can prey on Las Vegas Sands reputation in order to falsely attract more customers, leading to the lawsuit currently underway in China between Las Vegas Sands Corp vs. Unknown Registrants.

However, Las Vegas Sands’ limited approach highlights the futility of trying to tackle a threat which is a worldwide phenomenon and so one wonders whether a better approach for the company might be to take advantage of the industry and prepare its own online offering, instead.

Wynn Resorts belatedly joins Adelson

Until earlier this year Steve Wynn of Wynn Resorts had decided to take a “wait and see” approach to iGaming, although he did decide to hedge his bets by obtaining permission from the New Jersey Division of Gaming Enforcement to partner with Caesars Interactive in offering online gambling.

Nevertheless, the move threatened to undermine the cohesiveness of the American Gaming Association (AGA) after Adelson threatened to withdraw his membership of the organization, along with his contributions to its operating budget, and so soon after Wynn flip-flopped and performed an about face on the issue. As Wynn Spokesman Michael Weaver explained at the time; “Mr. Wynn said this weekend; online gaming does not appear to be a good entrepreneurial opportunity. Consequently, our plans are on hold until we understand the business opportunity.”

Boyd Gaming in pro-online camp

Currently, the American Gaming Association is divided between anti-online advocates such as Las Vegas Sands and Wynn Resorts on the one hand, and the pro-online camp which includes companies such as Caesars Entertainment, MGM Resorts and Boyd Gaming Corp on the other.

Since the US gambling economy reached its peak in 2007, many operators have been returning disappointing results, including Las Vegas Sands which was down by 7% in Q1 2014 and Wynn Resorts down by 1.5%. Both companies, however, reported spectacular quarters as a result of their Asian operations, while Boyd Gaming Corp, with all its casino operations in the USA, did not have the growing Asian market to fall back upon.

As a result, Boyd Gaming’s first quarter revenues were lower by 4%, but the company is now hoping it can reverse the trend by expanding into online gambling. The company owns the Borgata in New Jersey where its Party Borgata Network has already established itself as the state’s iGaming leader with a 36% share of the market. In June, the $2.4 million in online casino revenues and $1.075 million in online poker revenues generated may have done little to raise the firm’s bottom line, but if the segment continues to grow and even expand as more state’s embrace iGaming, then online gambling could subsequently become a significant cash generator for Boyd Gaming.