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Las Vegas Sands appears to have pulled out of its online gaming investment division, less than a year and a half after launching an effort to break into the digital gaming space – a business the operator has long shunned. casino.
Coins and morea Substack blog created by journalists Scott Longley and Jake Pollard, first reported in October that Davis Catlin, brought on board by Las Vegas Sands in July 2021 to lead the company’s investment in online gambling, left with his partner to create their own. the investment firm focused on digital projects.
Eilers & Krejcik Gaming analyst Chris Krafcik picked up on the news, telling readers about his consulting firm’s announcement last week that Sands’ online operations have been shut down. He said the company has made several investments in the online gambling sector, including funding to US Integrity, a sports betting monitoring service.
“Current investments are considered unaffected, although there is speculation that Sands could try to sell the investments to a third party,” Krafcik wrote in the EKG announcement.
Las Vegas Sands spokesman Ron Reese declined to comment on the status of the company’s online business, saying he had “nothing to provide at this time.”
Krafcik said the Sands closing will leave some companies hanging. Krafcik said Sands has returned “multiple signatures” with various businesses. He said that a start-up business in the online gaming sector required investment from multiple sources of funding, but Las Vegas Sands was committed to investing in all.
“Months later when Sands pulled the term sheet, none of the previous parties were willing to put in the money, leaving the business up and out,” Krafcik said.
He said the investments are in the “single-digit millions,” but the Sands-backed investment in Huddle Tech is a merger between two companies that plan to offer betting services to sportsbooks. of America, is estimated to be worth $40 million.
Las Vegas Sands executives blocked its entry into online gambling in January 2021, weeks after the death of company founder Sheldon Adelson, who strongly opposed the expansion of online gambling. Rob Goldstein, who took over Adelson’s duties as chairman and CEO, said the company is exploring different options in the Internet space.
Six months later, Catlin joined Sands to lead the company’s effort to become a “strategic leader” focused on the business-to-business space. He previously spent 14 years leading investments in public and private companies in digital gaming for a firm in Arlington, Virginia.
“Digital gaming and other related offerings are still in the early stages of development, and we believe it’s a very good opportunity for us to invest in the technology that’s being developed,” Goldstein said last month. July 2021.
Goldstein was not asked about the company’s digital gaming plans during last month’s third-quarter conference call.
However, during Sands’ second conference call in July, he said the company continued to “invest and (have) made some investments” in digital gaming companies.
The Sands’ primary focus is on its land casino operations in Macau and Singapore. In February, Las Vegas Sands sold its Las Vegas resorts for $6.25 billion.
In Macau, gambling revenue has dropped more than 50 percent for the first 10 months of 2022, due to the government’s travel ban in Macau and China’s no-nonsense policy on COVID.
Krafcik said the financial burden on Sands due to the decline in Macau revenue has weighed on the gaming company’s balance sheet. The digital division, he said, “integrated Sands’ online gaming strategy rather than launching a (business-to-casino) brand.”
Online gambling continues to grow
Adelson, who brought gambling and tourism to Macau, rejected online gambling, believing it would reduce revenue from traditional casinos and increase gambling and gambling problems. children’s gambling. He has spent millions of dollars lobbying like-minded state organizations to strike down any sign of federal legal action to legalize online gambling.
Six states have legal online casinos. In September, online gambling revenue — which does not include online sports betting — from those countries was $413 million, an 18 percent increase from a year ago. New Jersey leads the state in online gambling with $135 million, followed by Michigan with $129 million.
An Eilers & Krejcik report on the sector said that total online gambling revenue in the US was $5 billion for the 12 months ending September 30.
“We believe the head is well positioned for growth in mature markets, such as Pennsylvania,” he wrote in the report.
Nevada will remain a poker-only state, though delays in adding online slots and table games must be approved by state gaming regulators. Last year, a cross-section of Nevada gaming regulators said changes to online gambling laws should be vetted by the state’s Gaming Policy Committee and then approved by lawmakers.
“The state’s casino owners group remains strongly opposed to that change,” Eilers & Krejcik analysts wrote.
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