By Kate O’Keeffe
Staff Reporter
Dow Jones Newswires
HONG KONG—Las Vegas Sands Corp. Chairman Sheldon Adelson stressed the independence of the company’s Macau operations, telling a Hong Kong audience the U.S.-listed company isn’t trying to cannibalize the unit’s profit.
“We have independent directors here in Hong Kong—and believe me, they are independent,” Mr. Adelson said in a speech at the CLSA Investors’ Conference. “They speak their mind and I’m very glad they do.”
Mr. Adelson, chairman of Las Vegas Sands and Hong Kong-listed Sands China Ltd., was speaking Tuesday at an event closed to the media. A recording of the speech was available Wednesday.
The comments by the gambling mogul come just weeks after he had a high-profile fallout with Sands China former chief executive Steve Jacobs, who was let go from his post in July, according to people familiar with the situation.
Sands China, 70.3%-owned by Las Vegas Sands, operates three casinos in Macau, including its flagship Venetian Macao. Las Vegas Sands mainly operates casinos in the U.S., where gambling revenue has been stagnant. The parent also operates the new US$5.5 billion Marina Bay Sands casino resort in Singapore.
Las Vegas Sands’s influence on its highly profitable unit appears to have grown in recent months since Sands China’s board said in July it had terminated Mr. Jacobs.
The relationship between Messrs. Adelson and Jacobs grew strained as the latter wanted to retain the autonomy of Sands China and was unwilling to involve Las Vegas in the day-to-day operations of the Macau casinos, said people familiar with the matter.
Some of them said Mr. Adelson at one point proposed Sands China’s expansion project in Cotai be run out of Las Vegas, but Mr. Jacobs was able to talk him out of the idea.
Las Vegas Sands didn’t immediately return calls seeking comment.
Mr. Adelson’s reassurance about Sands China’s independence from its parent also comes as the Macau unit hosts nearly 40 executives from Las Vegas Sands this week for a series of management meetings.
That’s the largest group of Las Vegas-based executives to visit the Macau operations since the 2007 opening of the Venetian Macao, a Sands China executive said.
Sands China has since appointed Las Vegas Sands’s Chief Operating Officer Mike Leven as acting chief executive and named a chief operating officer and chief casino officer, both of whom were previously based in the U.S., among various other management changes. It said last month its over-US$4 billion expansion project in Macau would be delayed until the fourth quarter of 2011 due to a labor shortage.
Mr. Adelson said in the speech that Las Vegas Sands wasn’t attempting to cannibalize the profits of its Macau unit by driving patrons to Singapore, where the company acknowledges it is competing with a fiercer-than-expected rival: Genting Singapore’s Resorts World Sentosa.
Given the pressure to improve performance in Singapore and the readily available source of gamblers who already frequent Sands China’s properties, casino executives in Macau have expressed concerns that Las Vegas Sands could use Sands China’s resources to bolster the parent company’s Singapore operations.
“I want Sands China to be as successful as Las Vegas Sands is,” Mr. Adelson said. “No bank or any investor has ever complained that I’ve cannibalized, that I’ve shifted profits from one to the other.”
Mr. Adelson also said he was open to Las Vegas Sands teaming up with Sands China to capitalize on future expansion opportunities in Asia. But he didn’t clarify whether a partnership in Japan—where he said the company could open two huge casino resorts if the government legalizes gambling—would be a possibility.
Mr. Adelson added that Las Vegas Sands will change its name to Sands International or Sands Resort International at its next board meeting “to reflect more that we’re not just in Las Vegas.”
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