As of the end of 2011, Las Vegas Sands Corp. (NYSE: LVS) had spent $101.5 million on developing a project in Macau for which it did not have the required land rights. The government had rejected the company’s January 2011 request for the rights, and the Sands China division of the company appealed the decision. Today, Sands China withdrew its appeal.
Macau has replaced Las Vegas at the top of the casino league tables. Melco Crown Entertainment Ltd. (NASDAQ: MPEL), Wynn Resorts Ltd. (NASDAQ: WYNN), and MGM Resorts International (NYSE: MGM) are among the US listed companies with large casino/resorts on the island and its Cotai Strip, the Macau version of the Las Vegas Strip.
Las Vegas Sands claims to have invested $9 billion in Macau, and last year gambling revenue from the former Portuguese colony totaled 5x the company’s Las Vegas Strip revenue. But China is enforcing restrictions on casino expansion on Macau and restricting visas to Chinese citizens who want visit the gambling spot.
Whether Sands China will be reimbursed for the money it has already spent is not clear. The practice of beginning work following a verbal agreement on land rights which was once common has been slowed if not stopped altogether given the experience of Sands China.
Shares in Las Vegas Sands are down about -2.5% in the pre-market, at $45.01 in a 52-week range of $36.08-$62.09.