Please ensure Javascript is enabled for purposes of website accessibility

After a Late Entry, Can Las Vegas Sands Become a Force in Sports Betting?

By Rich Duprey - Jan 22, 2021 at 11:30AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The resort operator is already far behind an advanced field of rivals.

The recent passing of Sheldon Adelson, founder of the Las Vegas Sands (LVS 0.60%) gambling empire, marked the end of an era for the resort company, which helped shape the industry. Yet it could also herald a new beginning for the iconic casino brand since Adelson was a strict opponent of online gambling, and that's one sector of the industry that is booming and remains a growth opportunity.

Reports surfaced that the Sands was considering entering the sports betting market prior to Adelson's death, but with his veto no longer an obstacle, it's possible the company could now move more quickly. 

However, even if Las Vegas Sands does enter with its own app or through a partnership, has it delayed too long to be a contender?

Sports betting odds board

Image source: Getty Images.

A void in its business

Earlier this month, Bloomberg reported that acting CEO Robert Goldstein was in the early stages of discussions of either using the Sands brand or developing its own platform. While it does have a sportsbook at its Venetian resort in Las Vegas, it's being operated by William Hill, which is being acquired by Caesars Entertainment (CZR). It's a retail-only operation, though, and is not available online.

Although Adelson's opposition to online gambling was reportedly based on moral grounds (that gambling via a computer or mobile device made it too easy), and he had long lobbied to prevent its legalization nationally, that form of wagering also represents a potential threat to the company's brick-and-mortar casinos.

Yet Caesars and MGM Resorts (MGM 2.14%) have found online gambling boosts their bottom line. And during the pandemic, it has been a lifesaver for the industry, allowing it to survive while casino floors were closed.

Since the U.S. Supreme Court struck down as unconstitutional the federal ban on sports wagering in 2018, some 19 states now allow it in some fashion, while six more have legalized it but have yet to implement it. There could be another half-dozen or so that legalize it this year.

Las Vegas is still a ghost town

Even though Las Vegas casinos have reopened, they're only able to operate at 25% of their capacity, and tourism remains depressed. MGM's Mirage hotel and casino is now closed during the middle of the week, only operating Thursdays through Sundays, and will continue that way past February. 

Wynn Resorts (WYNN 0.43%) implemented midweek closures of its Encore hotel in October, and Sands' Palazzo is completely closed. The Las Vegas Convention and Visitors Authority says just 17.8 million visitors came to the city in 2020 (through November), down 54.5% from 2019 and the lowest turnout in 32 years.

While Las Vegas Sands had reportedly considered selling all of its Las Vegas casinos to fully focus on the Asian market, keeping them solvent could be the real driving force in its embrace of online gambling.

Making up for lost time

Getting into sports betting now, though, would leave the company far behind industry leaders like Flutter Entertainment's FanDuel, DraftKings, MGM, Caesars, and others, but it could also give it exposure in more states.

Las Vegas Sands has far-flung operations in Asia, with Macao accounting for the lion's share of its revenue and profits, while in the U.S. it is only represented in Las Vegas, having sold off its Bethlehem, Pennsylvania, casino in 2019.

That concentration in an era of lockdowns and social distancing means adding an outlet for gambling that can be done from home is almost essential. And though New Jersey is currently the biggest market for sports betting, New York may soon come online and could readily surpass it if for no other reason than it houses some of the biggest sports franchises and is so densely populated.

MGM established an early foothold in the state when it acquired the Empire City Casino, but that still leaves plenty of opportunity for others, including Las Vegas Sands, to make their mark. And other big states could eventually join in, including California and Texas.

A good bet for growth

While Las Vegas Sands will be behind the eight ball if it enters online sports betting, that's only in states where the practice is established. With consumers flocking to online gambling and more than half the country yet to legalize or implement sports wagering, there are plenty of plays yet for Sands to make.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

MGM Resorts International Stock Quote
MGM Resorts International
$34.37 (2.14%) $0.72
Wynn Resorts, Limited Stock Quote
Wynn Resorts, Limited
$63.07 (0.43%) $0.27
Las Vegas Sands Stock Quote
Las Vegas Sands
$33.46 (0.60%) $0.20
Caesars Entertainment Corporation Stock Quote
Caesars Entertainment Corporation

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.