Las Vegas Sands

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For the historic hotel and casino, see Sands Hotel.
Las Vegas Sands Corp.
Type Public
Traded as NYSELVS
Industry Hospitality, Tourism
Founded 1988
Founders Sheldon G. Adelson
Headquarters Paradise, Nevada, U.S.
Area served Global
Key people Sheldon G. Adelson
(Chairman & CEO)
Products Gambling, Hotels, Entertainment, Casinos, Resorts
Revenue Increase US$ 11.1 Billion (FY 2012)[1]
Operating income Increase US$ 2.89 Billion (FY 2012)[1]
Net income Increase US$ 1.52 Billion (FY 2012)[1]
Total assets Increase US$ 22.2 Billion (FY 2012)[2]
Total equity Increase US$ 7.06 Billion (FY 2012)[2]
Employees 40,000 (2011)[2]
Website www.lasvegassands.com

Las Vegas Sands Corp. (LVSC) is an American casino and resort operating company based in Paradise, Nevada, USA. The company is one of the leading global developers of destination properties. Its resorts feature high-end accommodations, gaming and entertainment, convention and exhibition facilities, celebrity chef restaurants and clubs, as well as an art and science museum in Singapore.

It has several resorts in the United States and Asia. Among its properties in the United States are two Five-Diamond luxury resorts on the Las Vegas Strip: The Venetian and The Palazzo. Also in the United States is the Sands Casino Resort Bethlehem, located in Bethlehem, Pennsylvania.

In Asia, the Marina Bay Sands located in Singapore is the most recent addition to the company’s portfolio. Through its majority-owned subsidiary Sands China Ltd, the company owns several properties in Macau, including The Venetian Macao, The Plaza Macao, Four Seasons Hotel Macao and the Four Seasons-branded apartments at the Sands Cotai Central development, as well as the Sands Macao on the Macau peninsula. The company is currently constructing a 6,400-room complex at the Sands Cotai Central, which will feature the Sheraton, St. Regis, Holiday Inn, and Intercontinental hotel brands.

Las Vegas Sands is involved in numerous charitable activities through its charitable arm, The Sands Foundation. The company also has an environmental program: Sands Eco 360°.

History[edit]

Entrepreneur Sheldon Adelson and his partners Richard Katzeff, Irwin Chafetz, Ted Cutler, and Jordan Shapiro bought the famous Sands Hotel in 1989. They opened the Sands Expo and Convention Center across from the hotel in 1990. The 1.2-million-square-foot center is currently the largest privately owned convention facility in the world.

In 1996, when the Sands Hotel was having trouble competing with the newer resorts on the Las Vegas Strip, Adelson imploded it to make room for The Venetian. Construction of the Venetian began in 1997, when themed hotels were the fashion. Modeled on Venice, Italy, it joined Excalibur, New York-New York, Paris Las Vegas and other themed hotels on the Las Vegas Strip.

When the trend in Las Vegas then shifted to more understated and "elegant" hotels, construction on The Palazzo began in 2005. Together, the Palazzo, Venetian and Sands Expo make up the world’s largest integrated resort, with 7,100 all-suite rooms, 2.3 million square feet of convention and exhibition space, and an array of shopping, dining and entertainment options.

Adelson got his start through the trade show business. As early as the 1970s, he saw the potential in personal computers. He and his partners founded the computer trade show COMDEX in 1979. They then sold it in 1995 for more than $800 million. In 2004, Adelson took the Venetian’s parent company public: Las Vegas Sands Inc. became Las Vegas Sands Corp.

Perhaps because of his start in the trade show business, Adelson focused his hotel efforts on courting the convention and trade show industry. At the time, when other hotels were focusing on gambling, his approach was considered unorthodox: the traditional strategy was to keep hotel rooms minimal, so as to encourage guests to spend as much time as possible in the casino. Adelson, however, had all his hotel rooms made into luxury suites; he put in mini-bars and big screen televisions; and he created comfortable work spaces in every room. By doing all this, he counted on business from the Sands Expo and Convention Center to keep mid-week occupancy strong. This proved correct; the company now makes more money in Las Vegas from conventions than gambling.[3] And Adelson's convention-centered approach is no longer considered unorthodox, but rather the paradigm in the hospitality industry in Las Vegas.

Adelson was also among the first to foresee the financial potential of Asia. Before his American competitors, he made the move to locate his company nearer to the Asian market. Macau, the former Portuguese colony turned over to China in late 1999, is the only place on mainland China where casino gambling is legal. Las Vegas Sands opened the Sands Macao in 2004.

Adelson next saw that 1 billion people are within a three-hour flight of Macau, and around 3 billion people are estimated to live within a five-hour flight. He realized that his company's future was in creating not one hotel, but establishing an entire strip---a Las Vegas-like Boulevard in Macau featuring many hotels of various styles and price ranges. But there were physical challenges to his idea: the total area of the small peninsula and two islands that make up Macao is less than 12 square miles; this area is densely populated; and, at the time, there was no land for such a large strip.

So Adelson created the land: he had his company fill the bay between the Coloane and Taipa islands. He called the area the Cotai Strip.

He then began construction of the largest inhabited building in the world---the Venetian Macao. To ensure the structure was stable, 13,500 steel piles were driven into the bedrock below. At peak times, 15,000 people were working on the construction site. Adelson set a three-year time limit for construction. This meant building needed to take place at a rapid pace, but the building was finished on time. The hotel officially opened at 7:18 p.m. on August 28, 2007---a time that was believed to have good feng shui.

The resort is twice the size of its Las Vegas counterpart, making it large enough to hold ninety Boeing 747 jumbo jets. The facility has an arena that will seat 15,000 people and one of the largest exhibition centers in Asia. The resort receives between 70,000 and 100,000 visitors each day and has a staff of approximately 12,000 on site. The 550,000-square-foot casino is also the largest in the world.

In 2008, Las Vegas Sands opened a Four Seasons hotel next to the Venetian Macao, as well as Paiza Mansions, which are “for invited guests only.” The company is also building resorts in Macau for a number of brands---The Holiday Inn, Intercontinental, and Sheraton Hotels---when they open on the Sands Cotai Central in the first quarter of 2012.

Despite its successes, Las Vegas Sands hit hard times in 2008 during the financial crises. At one a point the company was losing $1,000 per second. The stock price fell 97 percent within a 52-week period. To stop the bleeding, Adelson loaned the company $1billion of his own money.

He also continued with plans to build a $5.6 billion resort---Marina Bay Sands---in Singapore. Given the financial difficulties the company was facing, there was skepticism about the decision to build the Marina Bay Sands. However, Adelson argued that, with only one other competitor in Singapore, opening the resort would prove profitable. After it opened at the end of April, 2010, it posted a $600 million operating profit in the first eight months of business, a record in the industry.

The Marina Bay Sands has three 55-story sloping towers with approximately 2,600 rooms and suites. The most striking feature of the hotel is the Sands SkyPark, a park that is set on top of the three towers. The park has lush vegetation, an observation deck, several restaurants, and an infinity swimming pool that seems to flow over the building. The resort’s prime location right next to the city center allows it to serve as an entertainment site for the local population and also a destination for business travelers and MICE (Meetings, Incentive, Convention, Exhibition) events. A year after Marina Bay Sands opened, tourism to Singapore shot up 20% and the economy expanded by 15%.

Las Vegas Sands continues to look for new expansion opportunities. It is keeping an eye on countries such as Japan, Korea,[4] Vietnam, Taiwan and Thailand. In the US, the company continues to expand its 2009 resort in Bethlehem, Pennsylvania, which opened in 2009 to compete with Atlantic City for some of the New York-area market. Las Vegas Sands has also talked about the possibility of a Florida resort.

In Europe, Adelson and his management team were in discussions with governments in Madrid and Barcelona. In September 2012, Las Vegas Sands Corp. announced Madrid had been chosen as the destination for the gambling resort project dubbed Eurovegas.[5]More precisely, in February 2013 it was reported the town of Alcorcón, in the outskirts of the Spanish capital had been chosen as the site for the "EuroVegas" project.[6] It was expected to take about ten years to build six casinos, twelve hotels, a convention center, three golf courses, shopping centers, bars and restaurants.[7] However, in December 2013 the Eurovegas project was officially canceled and it will not be established anywhere in Europe.[8]

Properties[edit]

Image Property Location Date Opened
Venetian Las Vegas, NV.jpg The Venetian Resort-Hotel-Casino Las Vegas, Nevada May 3, 1999
Palazzo-at-night.JPG
The Palazzo Resort-Hotel-Casino Las Vegas, Nevada December 30, 2007
Casino061.jpg Sands Casino Resort Bethlehem Bethlehem, Pennsylvania May 22, 2009
Sands Convention Center 2010.jpg Sands Expo and
Convention Center
Las Vegas, Nevada 1990
Sands.JPG Sands Macao Macau Peninsula, Macau, China May 18, 2004
Venetian Macau.jpg
The Venetian Macao Resort-Hotel Cotai Strip, Macau, China August 28, 2007
Sands Cotai Central on 18 August 2011.jpg Sands Cotai Central Cotai Strip, Macau, China April 12, 2012
Marina Bay Sands in the evening - 20101120.jpg Marina Bay Sands Marina Bay, Singapore April 27, 2010

Las Vegas Sands also owns the Four Seasons Hotel Macao, Conrad Macao, Holiday Inn Macao, and Sheraton Macao at Cotai Strip, Macau, China.

Past properties[edit]

Property Location Date Opened Date Closed Notes
Sands Hotel Las Vegas, Nevada December 15, 1952 June 30, 1996 The original Sands Hotel in Las Vegas - demolished on November 26, 1996.

Sands Foundation[edit]

Las Vegas Sands Corp.’s primary philanthropic efforts are pursued through its charitable arm: the Sands Foundation, a non-profit 501(c)(3) organization. The foundation pursues a mission of supporting charitable organizations and endeavors that concentrate on assisting youth, promoting health, aiding wounded veterans, and expanding educational opportunities within local communities. The foundation also supports causes that empower minority communities and improve underprivileged areas, as well as other philanthropic activities permitted under relevant tax-exempt laws.

Sands Foundation charitable gifts are a combination of contributions and voluntary employee donations. In addition to millions of dollars in charitable giving, Las Vegas Sands also joins with employees, their spouses, children, and community members in programs and activities that aim to encourage, educate, and enrich the lives of those who live in the communities in which the company does business.

Sands Eco 360°[edit]

Sands Eco 360° is the sustainable development program of Las Vegas Sands Corp. The aims of the program are to maintain a safe and healthy work environment for the company's employees, to improve the quality of life in the communities in which the company operates, to minimize the ecological impact from its resorts, and to manage costs through recycling programs, sustainable purchases, energy efficiency and renewable energy.

As a result of the program, The Palazzo received a Silver NC (New Construction) certification from Leadership in Energy and Environmental Design (LEED). The Venetian (Las Vegas) and the Sands Expo and Convention Center received LEED-Gold EB (Existing Building) certification. The Venetian Macao has signed up with the EarthCheck environmental program, which has helped more than 1,300 organisations in over 70 countries to reduce their consumption of natural resources. As part of the Venetian Macao's partnership with Earthcheck, the resort is now able to report its carbon footprint per guest night or square metre, as well as water use per visitor.

Ownership and stock[edit]

CEO Sheldon Adelson and his family currently own approximately 52% of the company. In December 2004, the company completed its initial public offering with the ticker LVS on the New York Stock Exchange at a price of $29 per share. In October 2007, the company's market capitalization peaked at $52 billion at $144.56 a share. However, because of general market declines and overall concern of the short-term financial health of the gambling industry, the market capitalization sank to approximately $1 billion at less than $2 a share by March 2009.

On September 30, 2008, with the company stock trading at $36.11, Sheldon Adelson and his wife, Dr. Miriam Adelson, invested $475 million in the company through a 6.5% convertible note due in 2013. Subsequent to the $475 million investment by the Adelson family, and due to a further deterioration of the global economic environment, on November 11, 2008, the company announced that it will be receiving an additional investment of $525 Million from Sheldon Adelson and his family along with a raising an additional $1 billion in a secondary offering. "The Adelsons agreed to buy 5.25 million shares of preferred stock and warrants to purchase about 87.5 million shares of common stock at an exercise price of $6 each." [9]

In November 2009, the company completed an initial public offering of Sands China Ltd., its subsidiary that owns and operated its Macau properties, and raised a total of $3.3 billion in equity capital by selling a 29% interest in Sands China Ltd.

Aircraft[edit]

Las Vegas Sands Corp. currently operates 16 luxury jets, used primarily for transportation of the company's executive officers and VIP guests of its properties. Most of the aircraft in the Las Vegas Sands fleet are owned by and registered to Las Vegas Sands Corp., and a few are registered to Interface Operations, LLC, a Massachusetts-based company owned by Sands CEO Sheldon Adelson. Three of the Interface Operations, LLC aircraft--a Boeing 737-700, Gulfstream III and Gulfstream IV--are on lease from Yona Aviation, LLC. Sands' two Boeing 747SP aircraft are registered to Interface Operations Bermuda, LTD.

All 18 Las Vegas Sands aircraft are based out of Las Vegas McCarran International Airport.

One of the two Sands Boeing 747SP aircraft.
Aircraft Type Tail Number Notes
Hawker 800XP N885LS
Gulfstream III N623MS
Gulfstream IV N588LS
Gulfstream IV N688LS
Gulfstream IV N883LS
Gulfstream IV N972MS
Gulfstream IV N988LS
Gulfstream V N383LS
Boeing 737-300 N788LS
Boeing 737-300 N789LS
Boeing 737-700 N108MS
Boeing 737-700 N887LS
Boeing 767-300 N804MS
Lockheed L-1011 N388LS In Storage at Don Mueang International Airport
Lockheed L-1011 N389LS
Boeing 747SP VP-BLK
Boeing 747SP VQ-BMS

Contemporary Management Practices[edit]

Organizational Structure[edit]

Las Vegas Sands has established its structure as a bureaucratic state in which non-elected officials, CEO and Chairman Sheldon Adelson and the Board of Trustees, make the decisions and set the rules. Once the bureaucratic type has fully developed, Max Weber states that the office is “monocratically organized.” [9] This basically means that every employee has a single supervisor above him or her. The development of this hierarchy leads to a “system of super- and sub-ordination in which there is a supervision of the lower offices by the higher ones.”[9] Evidence of this traditional hierarchy can be seen in the attached images.

Management Strategies[edit]

Management strategies vary significantly within Las Vegas Sands depending upon the level, or status, of employees. For example, a president of a casino manages his Vice Presidents differently than how a pit manager, or boss, would manage dealers. High-level management relies more heavily on human and conceptual skills at Las Vegas Sands. Human skills are necessary in order to work with and through people to accomplish goals. Some skills that need to be utilized include the ability to lead and motivate employees. Conceptual skills can be described as the ability to see big picture goals of the company and have the ability to fit one’s operation into the puzzle. It should be noted that high-level management success does often depend upon an executive’s willingness to accept that organizational objectives must sometimes supersede those of the department.[10][11] Managing lower level, or floor employees requires a much different strategy at Las Vegas Sands. A lower level manager must ensure that floor employees possess the technical skills necessary to complete their job function. This means facilitating employee development while safeguarding gaming laws and practices. For example, a pit boss from casino operations has to balance the willingness to allow a blackjack dealer to improve his technical skills while ensuring the dealer is competent enough to orchestrate fair gambling. Lower level managers and employees also have the luxury of being responsible for their individual objectives. Because of this, they are able to focus almost all of their time and energy into their job function without having to worry about bigger picture goals. The strategy for managing employees relies on the relationship between employee level and type of skills necessary. As employee level increases, the need for human and conceptual skills increase. As employee level decreases, technical skill becomes more important.

Employee Management Methods[edit]

One method of employee management at Las Vegas Sands is the division of labor by assigning everyone specific responsibilities and tasks. This is most evident with lower level floor employees, where they are often assigned a singular objective, but is also evident higher up the hierarchy. For example, a cashier in the sports book is solely tasked with handling monetary transactions with customers. Higher-level employees are managed by being assigned tasks under a specific focus or division of the company. For example, the V.P. of Casino Operations has a very different job function that the V.P. of Hotel Operations.

Las Vegas Sands utilizes the division of labor because it increases the quantity of work that a certain number of people are capable of performing for several reasons. First and foremost, it increases the dexterity of every particular employee. If a poker dealer focuses all of his time and energy on his specific task, he will inevitably decrease the time it takes him to shuffle cards and improve his ability to deal them to players. Secondly, the division of labor saves time that is typically lost while passing one species of work to another. For example, a cashier does not make change and then move to a roulette table to perform dealer functions. This would cost the company time and money, as the employee would decrease in dexterity her cashier functions while being a slower and less efficient dealer than someone who solely focuses on dealing roulette. Finally, the division of labor helps employees discover more efficient work methods and machinery applications. When employees understand that they are tasked the same assignment everyday, they will inevitably try to discover or invent more efficient ways to accomplish said assignment.[12]

Las Vegas Sands has developed a system of management methods that allows the company to maintain its bureaucratic state. Max Weber wrote, “the relative optimum for success and maintenance of a rigorous mechanization of the bureaucratic apparatus is offered by an assured salary connected with the opportunity of a career that is not dependent of mere accident or arbitrariness.”[9] Because Las Vegas Sands operates in a money economy, they utilize salaries and the opportunity of merit based promotion as mechanisms to maintain their bureaucratic structure. Employees have a defined status that correlates with a salary and influence. Because of the way status is viewed within the company, employees are willing to subordinate themselves to their superiors while maintaining self-respect.

There are several other methods by which Las Vegas Sands manages employees. These include formal training for all new employees, regular performance evaluations as well as incentives to perform better and work more efficiently. Perhaps the best example would be floor employees, who are incentivized to work hard by receiving tips as a form of compensation.

Corporate Relationships[edit]

Las Vegas Sands has built relationships with several other companies with which they do business. They utilize suppliers for most goods found inside their properties. For example, they do not make the alcohol or food that they sell, they must purchase the dice, cards and other casino necessities from verified outside sources and often use consulting groups when considering significant changes or marketing strategies.[13] There is also a critical relationship between Las Vegas Sands and each of their subsidiary properties. Because they are a resort company, they have several hotel/casinos that are operating all over the world. Therefore, they must remain in constant communication with each property to make sound business decisions for the company as a whole.

Audit Controversy[edit]

Alleged antibribery violations in China[edit]

In March of 2013, media reports claimed that Las Vegas Sands informed the U.S. Securities and Exchange Commission that it had likely violated federal law against bribery of foreign officials.[14] The company fired back at these reports, stating in a press release: "The company did not report any violations of the anti-bribery provisions of the FCPA and it said news reports stating otherwise, such as the headline in today's New York Times which described the matter by saying 'Casino Says it Likely Cheated,' are both inflammatory and defamatory." [15] The company claimed that what it reported was that "in its preliminary findings the company's Audit Committee had advised that there were 'likely violations' of the books and records and internal controls provisions (i.e. 'accounting provisions') of the FCPA. A potential violation of the accounting provisions could range anywhere from a single transaction recorded incorrectly to other errors in the accounting records.The company said it will vigorously defend itself against that type of uninformed and misleading reporting." [16]

References[edit]

  1. ^ a b c Las Vegas Sands (LVS) annual SEC income statement filing via Wikinvest
  2. ^ a b c Las Vegas Sands (LVS) annual SEC balance sheet filing via Wikinvest
  3. ^ "Coffee With Mike". Las Vegas Sands Blog. 24 April 2011. 
  4. ^ Puvaneswary, S (July 4, 2012). "Las Vegas Sands eyes South Korea IR". TTGmice. Retrieved 10 October 2012. 
  5. ^ "Las Vegas Sands Names Madrid As Preferred Location for European Development". Las Vegas Sands. 7 September 2012. 
  6. ^ "Spain's Alcorcon town chosen for EuroVegas resort". 8 February 2013. 
  7. ^ "Vegas Sands picks Madrid for 'EuroVegas' project". cbsnews.com. 8 September 2012. [dead link]
  8. ^ Tobias Buck (Madrid) (13 Dec 2013). "Sheldon Adelson cancels $30bn Eurovegas project in Spain". Financial Times (London). Retrieved 13 Dec 2013. 
  9. ^ a b c d Max Weber, ―Bureaucracy.‖ Weber, Max. 1978 [1968]. Economy and Society. Berkeley: University of California Press. Pp. 956-969.
  10. ^ http://www.americangaming.org/
  11. ^ Kilby, Jim, and Jim Fox. Casino Operations Management. New York: Wiley, 1998. Print.
  12. ^ Smith, Adam. 1970 [1776]. ―Of the Division of Labour.‖ Pp. 109-121 in The Wealth of Nations. Baltimore: Penguin.
  13. ^ http://sands.com/corporate-overview/
  14. ^ Schwirtz, Michael (March 2, 2013). "In Filing, Casino Operator Admits Likely Violation of an Antibribery Law". The New York Times. 
  15. ^ http://investor.lasvegassands.com/releasedetail.cfm?ReleaseID=744731
  16. ^ http://investor.lasvegassands.com/releasedetail.cfm?ReleaseID=744731

External links[edit]