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Sands reportedly drops legal online gaming efforts – The Nevada Independent

Las Vegas Sands appears to have pulled the plug on its online gaming investment division, less than a year and a half after it began trying to break into the digital gaming space — a business long shunned by the casino operator. was avoided.

Earnings and moreA Substack newsletter produced 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 steer the company’s online gaming investment, set off with a partner to build their own. investment firm focused on digital initiatives.

Eilers & Krejcik Gaming analyst Chris Krafcik picked up on the news, telling readers of his advisory firm’s newsletter last week that Sands’ online efforts had been shut down. He said the company has made several investments in the online gambling sector, including providing financing to US Integrity, a sports betting monitoring service.

“Existing investments are thought to be largely unaffected, although there is speculation that Sands may seek to sell the investments to a third party,” Krafcik wrote in the EKG newsletter.

Las Vegas Sands spokesman Ron Reese declined to comment on the status of the company’s online business, saying there was “nothing to provide at this time.”

Krafcik noted that the closing by Sands has left some companies hanging. Krafcik said Sands withdrew “multiple signed term sheets” with various businesses. He said that one startup in the online gambling sector had sought investment from various funding sources, but Las Vegas Sands had committed to the full investment.

“Months later when Sands pulled the term sheet, none of the previously interested parties were willing to put any money in and the business was left high and dry,” Krafcik said.

He said the investments were in the “single-digit millions” but a Sands-backed investment in Huddle Tech, a merger between two companies that planned to provide betting services to US sportsbooks, was said to be worth $40 million.

Las Vegas Sands executives have teased its entry into online gaming in January 2021, weeks after the death of company founder Sheldon Adelson, who vehemently opposed the expansion of online gaming. Rob Goldstein, who took over Adelson’s roles as chairman and CEO, said the company is exploring different options in the online space.

Six months later, Catlin joined Sands to lead the company’s effort to become a “strategic investor” focused on the business-to-business space. He previously spent 14 years investing in both public and private companies in digital games for an Arlington, Virginia-based firm.

“Digital gaming and other related offerings are still very much in the early stages of development, and we believe there is an excellent opportunity for us to invest in the technologies being developed,” Goldstein said in the July 2021 announcement.

Goldstein was not asked about the company’s digital gaming initiatives during last month’s third-quarter earnings conference call.

However, during Sands’ second quarter conference call in July, he said the company continued to “invest and (has) made some investments” in digital gaming companies.

The Sands’ primary focus is on its land-based casino operations in Macau and Singapore. In February, Las Vegas Sands sold its Las Vegas resorts for $6.25 billion.

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Rob Goldstein, chairman and CEO of Las Vegas Sands

In Macau, gaming revenue for the first 10 months of 2022 has fallen by more than 50 percent, due to travel restrictions imposed by the Macau government and China’s strict zero-tolerance policy for COVID.

Krafcik said the economic pressure on Sands due to Macau’s revenue declines weighed on the gaming company’s balance sheet. The digital division, he said, “embodies Sands’ online gaming strategy rather than launching a (business-to-casinos) brand.”

Online gaming continues to grow

Credited with bringing Las Vegas-style gaming and tourism to Macau, Adelson has opposed Internet gaming, believing the activity would reduce revenue at traditional casinos and lead to increased problem gambling and underage gambling. He has spent millions of dollars funding like-minded grassroots organizations in efforts to kill any hint of favorable state-by-state legislative activity to legalize online gaming.

Six states have legal online casinos. In September, online gaming revenue — which does not include online sports betting — from those states was a combined $413 million, up 18 percent from a year ago. New Jersey was the top online gaming state with $135 million, followed by Michigan with $129 million.

An Eilers & Krejcik report on the sector said total online gaming revenue in the US was $5 billion for the 12-month period ending Sept. 30.

“We believe there is likely good headroom left for growth in mature markets, such as Pennsylvania,” the firm wrote in the report.

Nevada remains an online poker-only state, though expanding to add online slots and table games would require approval by state gaming regulators. Last year, a cross-section of Nevada gaming operators said any changes in online gaming regulations would have to be vetted by the governor’s gaming policy committee and ultimately approved by state lawmakers.

“A cohort of the state’s casino stakeholders remains fiercely opposed to such a change,” Eilers & Krejcik analysts wrote.

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