Las Vegas Sands Corp. (LVS) Earnings Call Transcript & Summary

All right. Why don't we get started? I am Vitaly Umansky, the global gaming analyst for Bernstein. This is a fireside chat with Las Vegas Sands. And with me is Rob Goldstein, Chairman and CEO of Las Vegas Sands. Just a quick introduction. Rob has been with LVS since 1996?

1995.

1995, okay. 1995. So very well versed with Sands from the very beginning. And prior to him taking on the CEO and Chair role early last year, he was the President and Chief Operating Officer. So extensive experience with Las Vegas Sands and all of their markets. We are using Pigeonhole, as most of you should know. If anyone has questions, please go to Pigeonhole and ask the questions. I'll try to get to them. We've got a lot to discuss. We have about 45 minutes. Why don't we just jump in?

Sure.

Start, as always, with Macao.

Okay?

So I guess 2 years ago when we were chatting, it was kind of the early days of COVID. We thought Macao would be the first place to recover, right, the first place to reopen, everyone thought that. Not just you, everyone. I thought that, everyone thought that. It seems now like it's the last place to recover in terms of the gaming industry.

Painfully true.

How do you -- I know it's hard to say, right, because there's a lot of speculation about when things reopen. But number one, are you surprised kind of by the government's kind of approach to COVID, especially with respect to travel into Macao? And then where do you see things kind of going from here in terms of that recovery trajectory?

I don't know when things recover, but they will. It's obviously a question of when does the government make the decision it's safe, and I have full confidence -- beyond full confidence that Macao will be very strong. It will mimic the U.S. recovery. And I think we'll -- there's no question in my mind that Macao is still the world's greatest gaming market. Yes, I'm disappointed. We haven't gotten open thus far. I also think -- I'm hoping that China might consider opening Macao and Hong Kong before the rest of the region of the world. So maybe we'll get the benefit of them a bit earlier when that day comes. But our confidence remains very, very strong. We spent a lot of money making our products better during the COVID period. So -- we have 36,000 people that are waiting to open and get started.

And when we think about this reopening, there's a belief, I have that view, and I think many other people have that view that there will be this phased reopening approach. We've already have the IVS visas to some extent. Maybe Hong Kong reopening is next. Historically, Hong Kong might have been 15% or so of revenues, maybe a little bit less for certain operators. How important is it to get that Hong Kong reopening done...

Well, it's less important, obviously, in China. That's clear. How important, I don't know. I don't know if we worry about whether it's Hong Kong first or China, but I'm not sure. I believe it will be a phased opening. It will be phased for both those SARs, and I'm hoping that they'll be simultaneous. It won't be Hong Kong first, then China. I hope it's together. And obviously, our perspective, China is far more important than Hong Kong for our business because we're more base mass oriented.

And there's been a lot of rumors, I guess, in the market about certain people being rejected on visas. A lot of that is maybe tied to the old junket business. Do you have concerns around kind of government changes around their view of what Macao actually is?

No. I think the government will support Macao. I think the Visa concerns you referenced are tied to COVID and the general belief that it's not the right time to travel outside the borders of China. I think that all goes away once the COVID issue is resolved. I think the government of China and the government of Macao are very anxious to see Macao go back and be strong and be what it was with a caveat the junket business would be lacking in, the controls might be -- I think they want -- we've always believed in -- even back in the early days, Macao is very important to be very careful, very selective about the customers, people we do business with. I think that's where the government is going. They want a well-run, well-disciplined, well-regulated environment with lots of investment, and there'll be lots of growth in Macao for those who played the game properly. So I have no trepidation whatsoever about the return of Macao, zero. If anything, the idea that Macao won't boom almost seems silly to me. The history is there to show us how that population thinks about what we do for a living, and we remain highly confident it returns in full force.

And then just to get this out of the way, the junket industry, which has obviously gone through a complete reversal of what it used to be, for Sands, it was always less important than maybe some of the other operators. But even that being said, it was still a large revenue-generating business, even though the profitability was fairly low. How are you thinking about the actual customer base within that junket universe? Are they going to come back to Macao? Will they become premium direct or premium mass players?

As you well know, the most important thing the junkets did for Macao was to provide liquidity for the premium mass. In our minds, that's the only risk that remains. The junket business itself is not that relevant to our business. The liquidity it provided is relevant. And there'll be a small segment of the premium mass population that may have a challenge with money. Other than that, I think it's a very small -- it's a sliver of our business. Again, I think the base mass business has always been our bread and butter. Premium mass has also been our bread and butter. It will return in force. And there are a few customers that may not be able to come back because of liquidity. I think they'll find -- that demand will remain intact. They'll find new channel to go to. And will we lose a few customers? Possibly. But I don't think it's material.

And then Sands has obviously, right before the pandemic started and kind of through the pandemic, has been repositioning -- you've been repositioning some of your assets at Macao, Londoner, in particular, The Four Seasons expansion.

Yes.

Kind of repositioning it towards a more of a premium mass segment because historically, you've been a little bit less exposed to that. Can you talk about what you're thinking with the premium mass?

It's pretty simple. We had a product, Sands Cotai Central, was built 12, 15 years ago. It wasn't -- in my feeling, it wasn't a very good product to begin with. It was ill-conceived and multiple brands and confusing. And it wasn't well -- it wasn't put together where we were proud of. We wanted to reposition the product, not simply for premium mass, but we looked at The Venetian, which at its peak was $1.6 billion. We looked at the SEC and said it was half that. And you had 6,000 keys versus The Venetian's 3,000. We thought this makes no sense. The retail is performing at half the numbers as well. What we've done is redo the entire -- spend a lot of money doing it. And our Board and Sheldon agreed to do that back, I think it was, '18 or '19, we started that maybe, maybe it was even '17. We did it with full confidence license renewal will be intact. We also believed that product should do a lot better and should do Venetian-like numbers, we were thinking. And so we invested a lot of capital, making a real attraction for all segments. It's a base mass attraction. They came out better than we expected. It's a premium mass attraction. It's a retail attraction. It has all the drivers that should make that a very, very strong product commensurate with The Venetian's numbers, I think, 6,000 keys. On the Four Seasons, we built what I think might be arguably the world's best Four Seasons. The rooms are extraordinary. The whole building is extraordinary, and it's built right -- that's focused at one simple segment, the high end of the premium mass. And I think it's the best product with a room of scale and quality decor. It's as good as anything we've ever done, and maybe the best thing in Macao. So we're frustrated we can't get these things into the market and see evidence of our work, but that's inevitable. So those 2 buildings, coupled with our Parisian, which already was a stellar product and, of course, The Venetian, we have the best products on Cotai, and we're very excited about it. Just waiting for the turn to come.

If you think about your product base offering in Macao right now, are there other things that you think you might need to do down the road or is this kind of the last major...

As you know this is a Brooklyn bridge type thing. You're always painting it, you've finished, you start, it never ends. We'll go back and redo another part of the -- we'll be doing the Sands Downtown at some point, hopefully adding some capacity that presents itself. It never ends. The CapEx -- you can't run a business like ours. CapEx is real. Depreciation is real. You've got to constantly renovate these buildings and keep it up to speed. It will never end. But the $2 billion we just spent on those products is quite a statement, and it puts us, I think, in a category we've never been in as far as quality of product. For premium mass and mass, we've got lots of capacity, the largest in the market and lots of quality. So we're very proud. What it produced is pretty astounding.

And if you look at the product offering in Macao, there are several properties that basically appeal to almost all segments, kind of the lowest end, the mid-tier, premium, VIP. Venetian is one, Londoner maybe another, Galaxy Macau is another. The other properties, while large, are usually much more focused.

Much more targeted.

When you think about the competitive advantage that you might have in running that type of business, right, what kind of appealing to all segments within each individual property, what do you think that actually is? What is the competitive advantage of having a Venetian or a Londoner versus a more targeted approach?

It comes from Sheldon's philosophy of 20 years ago. He was always a large market. He always thought big in terms of scale. He never wanted to be targeted to one segment. We built the Venetian in 2007. We actually warehoused a lot of casino space. We built that product. Sheldon believed that there will be lack of capacity once we open. We thought he was wrong, but he was dead right. We built a huge retail. I walked it in 2007, we opened it, it looked so big and by itself out there in Cotai. If anyone's vision was ever validated, it was the Venetian. Within a year, they're turning down the sheet rock and putting up new casino capacity. I think we've always been scale players. The Wynn folks do a great job at the very high end. Our Venetian product outperformed anything in the market for years. Our Londoner product will do the same. If anything, I'm a big believer, scale products work. No matter what the market is, base mass, premium mass, it all is additive to your bottom line, but also for the customer experience. You can't build -- in Macao, the market is so big and will be bigger in years to come. You got to service huge retail demand, F&B demand, convention demand. It's an incredible market. So we build scale products. Yes, the answer is, Galaxy did the same thing and you're rewarded. Those are the 2 best players in the market making money. You're rewarded because you -- the base mass business in China is spectacular, as is the premium mass. You need arenas, retail, you need scale. And Sheldon 15 years ago made that statement. When we built the Venetian, people just couldn't believe we opened that thing. I remember people, I won't name names, walking through it who said, "This is the greatest white elephant in the history of gambling. No one's ever going to come out here. It's so far away and so big and so too much space." And of course, it was $1 billion -- I think we spent $2 billion for making it, and it made billions and billions and billions of dollars. Scale, quality, works. And that's the foundation of our strategy in Macao.

And so for the Londoner and Four Seasons, $2.2 billion of expansion. Most of that has been completed already. What's left to go for that property?

There's more things to be done. We have to redo the rooms at another part of the Londoner, there's a part that's not, will be redone. There's another casino floor that will be redone that will happen in the years to come. The Four Seasons is perfect. I won't touch that for years. The Venetian always needs repair and maintenance and upkeep. We do the rooms constantly, like any hotel company does. Upkeep is -- there won't be the need to spend that kind of money in that scale, but there will be never-ending CapEx.

And if you think about pre-COVID, Sands did over $3 billion of property EBITDA in Macao. Kind of going forward, you've invested the $2.2 billion on expansion. Sitting today with revenues yesterday announced at 15% of what they were in 2019, it's kind of hard to pull out the crystal ball. But when you think about the investments that you've recently put in, in kind of the longer term, not necessarily this year or the year after, but long-term prospects of Macao. How are you thinking about kind of the potential for Macao in light of the new CapEx that you put in?

I may sound like a crazy optimist, but I think Macao's best days are ahead of it, and we're going to make an awful lot of money in Macao in the years to come because the license issue, which was -- that was the big issue a year or 2 ago. That's been pretty much more comfortable today for all of us, talk about every licensee. And I'm a huge believer in China and the resurrection of the market. And the world turns in cycles. The market goes up, markets go down. This COVID thing has been -- in my 40 years of being in this industry, I've never seen anything that even resembles this. I mean it's -- to your point earlier, if you had told me 2 years ago that this part of the world would recover the quickest, I've been skeptical, but that's how it worked out. And I think when we walk around New York today, walk around Europe, walkout around Europe, every part of the world, it's recovering. Singapore, Asia is recovering. It's just a question of time. We will make a lot of money in China. We will be market leaders again. Our investments will pay off in huge dividends for our shareholders. To think that Macao is not going to come back in a huge way, it's just my way of thinking, is unthinkable and silly. Yes, it's been very difficult. But no, I have huge confidence that the Londoner will make a lot of money for a lot of people. Four Seasons will be the best product in the market for that segment. And the 2 assets combined right across the -- they are going to be amazing assets. The Venetian and Londoner together are going to perform a mirabile 9,000 sleeping rooms next to each other. So we have full confidence in return of Macao, not even maybe.

And if we go back to 2019, one of the bottlenecks, especially coming into the second half of the year was occupancy rates. We were running at -- some properties were running at 100% occupancy for quite some time. We have a little bit new supply came online overall.

A little bit.

It's not that large. Obviously, coming out of COVID, again, we don't know the exact timing, but eventually, 100,000-plus people a day will be coming back into Macao.

Yes.

What do we do in terms of the market or the industry with only 38,000 rooms and 100,000 people a day trying to come in?

It's an age-old problem, happened in Atlantic City. It's happened in other markets. We need more sleeping capacity in Macao to maximize the enormous opportunity of China. You've asked the question. And the answer is, you need more sleeping rooms to maximize this ridiculous market. There could be a much, much bigger market, but people come from far away. It's not a day-trip market. It's a growth market because of the scale and size of China and the population base. So we've got to figure out a way. Hopefully, the government will be -- enable us to build more sleeping, more lodging, more entertainment, more retail. It may not be gaming, but it will be other drivers to enable people come here. 90 miles south, your Atlantic City basically fell apart 30 years ago because it has huge demand on weekends, but they only got 5,000, 6,000, 7,000 keys. And so it couldn't handle demand. Macao is a much different market, but the problem is somewhat similar. You need -- for long-distance markets, you need sleeping capacity, lodging capacity. And I think that's -- it would be very helpful for the market, for the government, for the operators to build those rooms. I hope it happens. Hope we're able to invest more in the Macao.

And the government -- and we'll get into the concession renewals and kind of the new Macao gaming law amendments. But one of the points that they've made now for a long time is they want to see more investment in Macao and Greater Macao, maybe that includes Greater Bay. Do you envision as kind of a part of the new concession term, the government maybe not mandating but wanting to see more of what you're talking about, which is tourist-related nongaming investment and more beds.

I think so. I sure hope so.

And where does that happen? Does that happen in Macao? Or does it happen next door?

Either place. Either works for me. Obviously, we'd like to build in Macao. Closer to our buildings, the better. We could live [indiscernible], and that's what the -- we're going to do whatever government asks us to do because it is still the greatest market in the world despite today's trauma and disruption caused by COVID. There simply isn't a better place to invest in land-based gaming than in Macao. And yes, [indiscernible] is very popular, so Macao will never come back and oh my God. You got to think beyond today, you have to. And to your point, is it going to be in Macao proper or crossover [indiscernible], either way works. But you and I both know that market to grow and grow, it needs more base mass, more premium mass, make that happen, more tourism, it needs lodging capacity. And wherever the government tells us to go, we'll go and then how much they want us to invest, we will be happy to invest. It's a very exciting proposition to build more capacity, lodging capacity in Macao.

And there's been some talk, I guess, recently coming out of parts of the government and some talking heads in Macao about the need to maybe diversify into more international visitation in Macao. With the current structure as it is in Macao in terms of who works there, how the properties are positioned, it's probably somewhat of a difficult proposition. Maybe I'm wrong. How would you respond to kind of this potential desire to have more international visitation into Macao?

I think you're wrong. I think it's a very desirable place. I mean, I've been going to Macao since I went there in 1981 the first time. And it was a pretty rough place. The change in Macao over the last 4 is incredible. When I go there -- I haven't been there in 30 months. But when I walk through Macao today, I kind of chuckle it, 4-star restaurants and 5-star hotels. And it's magnificently luxurious place with all the things for tourism. It's got great looking rooms, great looking -- retail is phenomenal. We provide entertainment, our theaters. We built it back in 2007, not realizing what a huge asset it would be. Every major star in the world performs every weekend in these places. I mean if you want entertainment of that caliber, Macao offers it. Why wouldn't -- and now with the access to Hong Kong Airport, why wouldn't it become, for Asia, specifically, I'm not sure it's going to come 20 hours away from the U.S., but why wouldn't all of Asia want to go to Macao? It's spectacular. I mean it's got the best food, the best retail. The accommodations are great. It's an amazing place. To transition what it was to what it is shows you the power of governments thinking progressively, getting people invest, guys like Sheldon Adelson showing up and saying, upward of $15 billion on the ground. And yes, he was rewarded for it, but so is Macao. His vision grew Macao. And Macao is a very stimulating, fascinating, tourist-oriented place for the Pacific Rim, I think, for sure. And the airport, the access is now -- the old days, of course, Hong Kong and the boat. Today, you can fly in, get in the car and be in Macao, why wouldn't it grow in equivalent to any other market in any place in Asia and still do well in China.

I guess the problem is always going to be the bottleneck with [indiscernible].

Well, that's -- and as we referenced, that's -- the demand for Macao is going to far outstrip supply. That's the fact of life. If you double the capacity of the lodging in Macao tonight, it wouldn't be enough for the growth that's coming in the balance of the decade. Someday, people look back 2 years from now and say, it was obvious, Macao was going to go crazy and be successful. But you're right, the bottleneck remains a real issue for Macao. We need more sleeping rooms to make that market be what it could be.

And then before I move on to Singapore, concession kind of tender process, the government has been, I think, pretty clear that they'd like to get this process done with by the end of the year.

Yes.

Everybody is being extended to the end of the year.

Yes.

I guess there's a couple of maybe uncertainties around the gaming law amendments. When you looked at the gaming law, are there any serious questions out there that you have with respect to what the gaming law is going to be? Kind of a hard question to answer?

No, it's not. I honestly I think the government has done a good job and the government has provided us with a lot of guidance. I won't publicly talk about what's happening in the inner circle. But I think all the operators have been rewarded for their patience and persistence going through this whole thing. And I think it will be wrapped up in the next 6 months or whatever. But I don't think we should be concerned about the nuance of the gaming law. If anything, it's getting better for the operators, and I think it's very favorable. We shouldn't complain. It's going to be fine. And when we get the license, life goes on. It was an issue that people were -- a lot of people are concerned in the Macao of the future, and we now know it does. So is there going to be a change here or a change there? Yes. But is it going to be material? No. Life will return to Macao and as we behind this, we can look forward to next 10-plus years.

And then maybe switching gears to go to Singapore. Obviously, that market locally had held up fairly well, I think, better than you sort of expected, right, during the COVID years. And the strength of both the slot and the table game market locally was quite good.

Yes.

We've had almost an international reopening of Singapore in the last 2 months.

Yes.

How are you seeing business change over the last 2 months in Singapore?

It's getting better.

And so I know you kind of can't talk about forward-looking numbers.

It's getting better and it will keep getting better. It's not complicated. You look at the tourism numbers. The only problem in Singapore, to your point -- local market has been terrific. We're grateful. The only problem, as you may know, the airlines and the labor issues and connectivity to China Hong Kong, it's still not -- the lift, the airlift is still a challenge for all operators. And you saw the numbers, I think you've seen numbers. Singapore's demand is huge. The business is going to be spectacular in Singapore, but there are challenges with getting who is back open. We did not fire any of our employees. So we're fortunate, we have a full staff ready to go. We made a decision. I think most of you know Sheldon made a couple of decisions people were astounded by, one of which is we kept all employees in Las Vegas when everyone else fired them. We also kept all our employees, obviously, in Macao and Singapore. Not everyone did that. We now have a full complement of employees, and demand is going to be breathtaking. But the caveat is lift is still -- is an impediment to growth over there, and we probably won't see a return to more normal airlift until the latter half of the year.

And then even when we get to the latter half of the year, China is still an uncertainty in terms of them opening up to previous level.

Yes, it is.

I think there's expectation, I agree with you, that I think Macao and Hong Kong will open up for China before China opens up for the rest of the world?

Agree.

When you look back at your pre-COVID business in Singapore, how important, how large was kind of the mainland Chinese or the Hong Kong Chinese customer for Singapore?

It's important, but we -- I believe we can return to pre-COVID numbers before China fully opens. And I say that because there's been a seismic shift in our thinking about Singapore, and that's predicated on a couple of simple facts. Singapore has become a very, very important place for people to live and move to in through the COVID period. We've also seen the challenges that the operators in Australia had, which has made that market less desirable for Chinese visitors. I think Singapore is taking its place, a whole different level of expectation from my perspective, it's more important than ever in the region. It's very important for a lot of people moving there. The residential prices are booming. Singapore is a very, very desirable place to be. Our belief is Singapore for us is going to be a huge growth property in years to come. And yes, China is important. It's always important for any business in the region. But we can do very, very well with some China participation and the day will come, to your point, when they open up fully probably sometime next year. I think China will open up to Macao first, I agree with you. But subsequently, if you take a long-term view of the world, China [ has not closed ] to Singapore, it will open, and we will get the lion's share of the business we had before, if not more. But I think you have to really think about the geopolitical shifts in the region that are going to benefit Singapore in a very big way. Australia is a very big competitor for that premium mass segment, the high end. I think that's not true at this point. It's less desirable. And I think Singapore has elevated quite a bit in people's minds. They've handled the pandemic, the government, hats off, they've done a great job. We're going there in a week or 2, about 10 or 12 of my colleagues and I. And we're delighted to get back and see it. And we're investing, as you know, $1 billion currently in our current -- our current asset had one flaw. It was built, I'll call the pre-premium mass era where you've built suites to high rollers and you built rooms. We need to be in the middle there with more premium mass suites, and we're reconfiguring our building right now to address that. We think we have huge upside in Singapore. I've always thought $1.7 billion was an awfully good number. We achieved that, the peak, at MBS. I believe we can do much better than that in the future as we get our product up to speed and our addition up to speed. So we have a lot of big plans for Singapore.

And there's a lot of money going to Singapore by both you and...

We've noticed that.

By both you and Genting. When you think about returns, and you've always been historically focused on kind of return on investment, you've got these 2. We've got $1 billion almost renovation, redevelopment of the existing assets that cater more towards premium. You have a more longer term Phase 2, which you've described in detail before. Are you looking at kind of the returns on that investment to be comparable to what you've had in the past? Do you think there's more constraint around that return?

You can't put the return -- you can't get -- well, if we put [ 5.5, 5.6, 5.7 ] in the Phase I, you can't build properties that anymore. You couldn't -- if you want to build Singapore MBS today over again, I get -- I [ want to be ] $12 billion, crazy number. So you can't expect the same returns because the cost of building things is up. But you can get a very, very favorable return and you get a growth return. What I like about Singapore is it's a moat asset. It's just us and Genting. And I don't think there'll be more competition in the market, very, very -- it's a wonderful government to work with. It's a great country to work, a city state to work within. And we're privileged to be there. We're lucky. And I think our growth potential there, no, we won't achieve the same return on capital. It's impossible. But then again, same in Las Vegas, if you put money in Las Vegas, it's hard to get those kind of returns because cost of a building is much higher. But I do think Singapore will reward us handsomely and the growth potential there is spectacular. That market is going to grow and grow and grow. As you referenced, people are moving there leaps and bounds. The demand for residential real estate in Singapore is through the roof. And I feel it's the first time it's got a lot of room to run to the upside for us.

And have you reevaluated what it is that you want to do on Phase II or is it still the same strategy?

Yes. It's very similar. It's premium mass focus, it's entertainment focus. There will be a convention component. It's creating a really top-tier quality room for that premium mass customer we get throughout the rim and giving that personal entertainment options. We already have the best retail. We have amazing dining. It keeps getting -- it's more experience-driven. It hasn't changed dramatically from the initial plans. It just made us clear during the pandemic and watching Singapore gravitate towards that in that Asian marketplace, it makes us feel how fortunate we are to have this asset. We've got to make it better and keep growing it and make Phase I better, make Phase II better because our open goal is to see this thing make 2 plus 2, 5 and keep going. We believe it's an asset for the ages, special asset.

And Rob, historically, there's always been, Sheldon talked about this, potentially selling off the retail asset in Singapore.

No. Not going to happen.

That's off the table now.

No. We went through that phase and we tried it and thankfully, we didn't sell it because it's got a lot of room to run. And our retail business over there is special. I'm very grateful we didn't sell it because it's a growth asset within a growth property. And, as you know, Singapore is a great retail market anyway. I think during the pandemic, we showed our ability to grow that retail business. And it's performed very, very well. Very proud of it. We keep getting it better and better. And no, we're not going to sell that asset.

And then when we think about supply that's been slowly coming online across Asia, Philippines, Cambodia, how much of a competitive threat is that to Singapore because that's one concern some people have?

I don't. I think Singapore is very unique. It's a very special place. It's a very special property. No disrespect to what I've seen in the Philippines, Cambodia, but we're in a different level. And I think they're going to make a lot of money and do fine and more power to them. But no one exists in the place we're going to exist. When we get done with our renovation in MBS, and it's going to be done in, I guess, late '23, early '24, we get done with that and start Phase 2. We're taking it to a different level. There won't be a competitive product in the market except for Macao that's equivalent to Singapore. And I also think our betting limits, our marketing team, our quality of product, the experience in Singapore is pretty special, very unique and not easily emulated at any place. So we're in a very good place in Singapore.

I get this question often from investors.

By the way, I wish we had 3x the rooms because demand, to your point earlier, MBS only holding us back is we just wish we had more rooms between local demand and foreign demand. We're always looking for more keys.

Because you were running at 98% or 99% occupancy.

Yes. We did run 140%, which is painful.

I get a question often about kind of your competitive advantage as LVS by having both Macao and Singapore together as 2 assets because no one else has that.

That's what I heard.

Could you talk about where the benefit actually lies if there is one?

Well, there's benefit, first of all, just in marketing and human resource. I'll start with the obvious. We get the best talent. I think people want to work with us because we have 2 very different Asian products jurisdictions. So we get the best talent pool, comes to us first. That's number one. Number two, we get marketing synergies. I mean, obviously, you can -- we have -- one is a public company, obviously, Hang Seng. And one is part of LVS. But we do have marketing synergies to some degree. I just think you also have the brand value. People know we own Singapore and Macao and vice versa. The advantages are many, and it's a privileged place to be. And I think we made the bet in Singapore. A dozen years ago, people were curious that could Singapore ever be that important. It turns out to be wildly important. And it supports Macao and Macao supports Singapore. Obviously, customer events, awareness, human resources, the advantages are many.

So jumping gears a little bit. Las Vegas, you guys sold Venetian and Palazzo. With kind of the booming recovery that we saw in Vegas, do you have any regrets about selling it?

No, not at all. I'm a big fan of Las Vegas. I think we made the right decision. I know people -- it's always easy when markets boom when you sell something. It's like when you sell a stock, it was $22, it goes to $32, okay. These things happen. But you and I both know there are cycles in life and cycles in markets. I know Las Vegas for 30 years. And it's always been a market that trades up and trades down. But the takeaway from Las Vegas is twofold. One, it gave us ridiculous liquidity and balance sheet strength to weather the storm. That's pretty clear. We have no trepidation about if the COVID goes along for 6 months or whatever, we're fine. Secondly, we honestly believe, as I told you a second ago, that Singapore and Macao are high-growth assets. They're going to grow and grow. They're not stopping at $1.7 billion or $2.2 billion or in Macao's case, who knows where it goes. We want to invest in places with growth -- large growth potential, but also their moat assets. The great thing about Singapore and Macao is their protected class assets. In Vegas, and again, I'm a big fan and I love the city, I love the state, but there's limitations to how much you can make there. Today is a very fat day, people making lots of money. It's a gaming-driven recovery. It will not last. They never do. It's not Las Vegas, every market I've worked in we've seen these kind of boom. I think it will return to more normalcy as the country goes to $7 gallon gas. And Vegas is a great place. It's a very sustainable place, but it's highly competitive. The CapEx is enormous. And frankly, it does not have the growth potential. That money redeployed in Asia or perhaps in a U.S. jurisdiction will be much greater rewards. When we have sold it, had the world has stayed constant? Probably not. But in this environment, with what we're experiencing in Asia today with our growth opportunities, both in Asia and maybe even in the U.S., I have no regrets.

And since now you're not involved in U.S. casino operations, I'd say, obviously, the industry has been going through several years of changes with iGaming kicking in and sports betting kicking in. As just as an observer, having been in the industry for so long, how do you view the gaming industry, the casino industry changing as a result of kind of the interactive kicking in, in the United States?

Well, we're in the middle of that one. I mean it's fascinating to watch the whole valuation process, digital -- I think there's a big future in digital. I just don't know how they get to the -- turn the corner. Some of these numbers are scary to me. Some of these losses and the cost of being in these markets is, I'm glad I'm not part of that right now. But do I think digital is helpful and grows the market. Yes, I do. But I still believe the land-based experience will always be fundamental. I don't believe any people -- people will stay home and never leave their build, their house, they're going to sit? No, they don't. They want experiences. They want to go do things. And also, I don't think it impacts me in Asia because I don't think you'll see that kind of thing in Asia. So I think we're protected once again there.

Do you see any prospects for interactive gaming being legalized across...

Let me say interactive, I don't see ...

iGaming?

I don't see iGaming. I do see -- maybe there's some -- there could be some sports betting or things like that. I don't see -- again, unlike the U.S., I'm not impacted by because in Asia, in Singapore and Macao, I don't think you're going to have a digital experience over there. So that's kind of another reason I like Asia. As for the U.S., I think it's great. The market is going to grow more customers, but the profitability and the competitive nature, the sad thing about sports betting, it's such a great business, but it's so competitive, and it's so much promotional that it's not turning out as well as we thought it would. But where it goes, I don't know. I don't think it's hurtful, it exposes more people to gaming. And I do think there's a big future in online gambling. I do think it'll happen in the U.S. in a big way once the operators figure out how to make it profitable and they will.

Yes, it will take time.

Yes.

So you've gotten proceeds from the Las Vegas sale. You'll have more proceeds coming in, in a few years' time.

Yes.

Let's talk about capital allocation and how you are thinking about the balance sheet going forward? Obviously, there was a strong emphasis on maintaining investment grade at the company. That's been a little bit of a chink in the armor, has happened already. Obviously, the business is tough in Asia. How are you thinking about capital deployment over the next couple of years. When you think about investment, maybe talk a little bit about investment strategy but also strengthening the balance sheet, paying down debt or investing in Singapore or looking at other opportunities or returning to capital deployment back to shareholders?

Nothing has really changed for us. We want to return to investment grade. That's our goal. We want to return dividends to shareholders, and we want to grow. And all that's predicated on the return -- our Singapore business, I'd like to think about, it's going to be fine, more than fine. Our Macao business, that switch will go on when it goes on. I can't predict. I don't -- as you've -- I think we both experienced 24 months of confusion and frustration, and I stopped predicting as I'm always wrong. So I think the better thing is sit back and wait. But as far as our company, we're very simple people. We want investment grade. We want to do dividends at some point. We want to go out and grow. Sheldon always had that joke about my middle initial, G was for growth. We want to build new buildings and make more money and grow our company. At the same time, what will win the war as far as dividends versus investment in new assets depends on what's out there. If the markets are good enough, we'll -- we've always been disciplined. We've never jumped in things and done things, I think, well thought out. And I think the Vegas sale validates that. We're now in a very strong position to wait this out and have plenty of money to ride out the storm and invest at the same time. So when the day comes for a new asset, if there's something happens in the U.S., we have the money to invest. If we can be so fortunate to invest in Macao, we'll invest in Macao. We are investing in Singapore aggressively. And we hope we can find other things to do with our money. However, dividends are always part of the equation. When the time is right, we'll return the dividend in place in the equities market, but that's not today. So nothing's really changed. We're the same company except we've gone through a dramatic 24 months of unprecedented downturns. And who could have thought this would happen, unprecedented.

And when we think about returning capital to investors, often some shareholders are asking, they got this cash in, the stock is undervalued. Why are they not buying back stock?

Someone said they would criticize me personally. I started laughing and said, okay, I've millions of shares of stock. I'm fully invested. I've been here for 20-some years. If I buy this more stock, it doesn't matter. If the company buys 100, 200 -- it's not relevant. I think if you think confidence that we're not going -- we're not confident, I think that's kind of silly. The family owns 50-whatever percent, 67% -- 57%. We've been here a long time doing the same playbook. We're not running for cover, we're not to prove to anybody. We make an investment to show we want -- we believe in it, we believe in it. We also believe in liquidity. We also believe in being careful. We believe in investing. I'd rather make $1 billion or $2 billion or $3 billion bet on growth in something other than buying some stock back to a piece and people think, oh, show us your focus on the stock. We're very focused. And let's be honest, we've had 3 of the 4 drivers we need, we're seeing a Singapore recovery. We're seeing a license resolution in Macao. We have plenty of liquidity, and we don't have any pressure on our balance sheet like other people do. We need one more thing to happen as we're trying to open up to Macao. When that happens, our equity will trade accordingly, and we're very happy. I think we don't need to buy some shares to show we're focused and we're believers in the company. We're focused and believers in the company. No question about it.

And then before I wrap up, just a few minutes left. You've talked previously about potentially looking at maybe smaller investments in the digital B2B space.

Yes, we have.

Has that strategy evolved at all?

Yes, it has. We've made some investments, but they're not material. To be honest with you, we haven't -- we're watching the digital space and wondering if there's a launching pad for us to get into it in a bigger way at some point. It's not off the table. We've watched the valuations. We watched what's happened with public companies. And we've also watched the evolution of that whole business, and we're questioning whether it's the right time for us to be in it, what's our role in that business. It's not material to our company today. We'll keep looking at it. Again, what's material to our company today is return to normalcy in Macao. We've already -- we're past worrying about Singapore, it'd be just fine. That market is going to come back very nicely. And so the digital is a small and frankly, at this point, not a material part of our investment approach.

And other U.S. bricks-and-mortar opportunities. Obviously, Florida was a big one that you guys were looking at.

Missed it.

Missed and failed.

Yes, we failed.

New York now seems to be potentially moving down and will be moving down in other license. That's something you've been tied to potentially looking at. And then Texas has always been something that could amount to be a pretty big market.

Well, these are $1 billion EBITDA markets in my opinion. We're only looking at large scale. We're not going to buy a regional casino corp or buy a -- we've sold Pennsylvania years ago because it didn't fit who we were. We need things of scale and importance. And we've identified 2 markets that give us that. Florida gave us that, too. So we'll continue to look at large-scale. For us to buy something like $100 million, $200 million isn't worth our time, frankly. We'll continue investments in Macao and Singapore and look for large-scale U.S. purchases if they're out there. But they're few and far between because there's not many states like New York or Texas or Florida, frankly. So it's hard for us to find things of scale. Those are great states there because, again, you protect it with number of licenses, competition. They feel like very good opportunities.

And finally, I guess, with what's happening in Macao and the slowness there, if you think about what's keeping you really up at night in your business, right? And then how do you mitigate that concern?

Honestly, I sleep pretty well. I feel we're in a really good place. I mean that sincerely. I feel like if you look at history, you don't get caught up in a week or 2 or a year. We're in the midst of something that's in our lifetime, it's one of those things you could never have met. It's the third thing to happen in the last 20 years, the World Trade Center of 2001, that awful situation; the financial crisis of '08, '09; and the COVID. These are amazing things that happened in the last 20 years, but they do -- life does return. I mean the Spanish flu is 100-plus years ago and 60 million, 70 million, 80 million people died. Life does return and life will return to Macao. I kind of chuckle people say, "Oh, it's never been the same." Why? Why won't it be? People want to gamble. They want to come to these resorts. They want to have a good time. Of course, they'll come back. The same way Vegas came back, the same way regionals come back. Not much -- the license renewal for me was a big -- it was existential because if I was wrong, I thought we had every -- I thought for sure we'd get license. And I never questioned it, but you want to be right, one validation, we got the validations happening. I want to see Singapore come back. It's coming back perfectly. We have ample cash to withstand the storm. We need one more thing to happen, and I feel very confident when the government decides to open China, we'll be there. We'll wait patiently. We've been great fans of Macao and we're just waiting for that day to happen. So other than that, I can't do anything about it. I can't worry about something I can't control. I have no control of that. So wait patiently.

Great. Wait patiently. Well, it'd be good to get back to Macao. I haven't been there in almost 2.5 years.

Me too. I was there in -- I was in -- I was actually in Beijing and Macao in January of '20. And someone mentioned me this virus that was out there. I thought, oh, hope that's not too bad.

That's great.

Thank you for joining. Appreciate it.

Thank you, Rob.