For fifteen years, Las Vegas Sands (NYSE: LVS) has been in expansion mode. After imploding the Sands Hotel in 1996, CEO Sheldon Adelson built The Venetian in Las Vegas and then quickly took the company's growth overseas.

The Sands Macau was opened in 2004, followed by The Venetian Macau and Palazzo in 2007, Four Seasons Macau in 2008, Sands Bethlehem in 2009, Marina Bay Sands in 2010, and later this year sites 5 and 6 are slated to open in Macau. That's a lot for one company to build, and it's time to start thinking about how to start reducing risk or returning money to shareholders (or debt holders). Below I have a table of the four major casino operators comparing their debt to equity, property EBITDA, and revenue for 2010.

Casino Operator


Debt/Property EBITDA


Las Vegas Sands




Wynn Resorts (Nasdaq: WYNN)




Melco Crown (Nasdaq: MPEL)




MGM Resorts (NYSE: MGM)




Source: Company 10-Ks.

By looking at the numbers we can see that MGM is in a much worse financial position than competitors with a larger presence in Macau. But among the three casino giants focused in Asia, Las Vegas Sands has the worst ratios when we compare debt to equity, property EBITDA, or sales.

Las Vegas Sands did reduce debt by $884.6 million in 2010, so it is on its way. But with $3 billion of cash on the balance sheet to end 2010, $1.9 billion in operating cash flow (and growing), and large capital expansions coming to a close, it's time to reduce that debt further. If Singapore and Macau continue to grow, it's conceivable that Las Vegas Sands could pay off its $10.1 billion debt within four years -- if it wanted to.

Remember, it was a large debt load that almost sunk Las Vegas Sands just a couple of years ago. Now that times are good, Adelson can loosen the hold that debt has on his company if he chooses. Or he can go chasing a risky development in Spain and stack more debt on the company.

I'm hoping Adelson is willing to dramatically reduce debt and show shareholders he has the ability to reduce risk at Las Vegas Sands. When the company posts first quarter results later today, we'll see if that's exactly what the company starts doing.

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