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

All right. Good afternoon. I'm Richard Clarke. I'm the Global Hotels and Leisure analyst here at Bernstein. Delighted to have Rob Goldstein, the CEO of Sands with us today. Thanks for joining us today. It was great to talk to you. Let's maybe just start with the uncertain macro world we find ourselves with and then we'll get a little bit more on to your long-term strategy.

[indiscernible]

So I mean, I guess if we look at your share price, much like most of the stocks I look at, you're kind of in your round trip $42 down to $32, back up to $42 again. Has that reflected what you've seen internally? Did you see turmoil around the initial imposition of tariffs? And has that begun to ease off? Or is it sort of overstated the amount of volatility you were seeing within the business?

I'm not sure tariffs are that critical right now to our stock price. I think the market has been soft since COVID and never made the rebound the same way the U.S. did. There's a different mentality in China in terms of post-COVID. I'm not sure that tariffs doesn't help us, obviously, it's negative but it doesn't help the China market. But I think it's many other factors. Post-COVID, we've been in a very different place in Macau than pre-COVID. And a different world over there, much more uncertain and much different in terms of incentives and it's been a market we've struggled with a bit. And we opened Londoner in full a few months ago. So hopefully, that will help our business. But no, I wouldn't think tariffs have been the reason our stock has gone down. There's obviously just lots of concern about the U.S.-China relationship and China in general as a consumer market has been struggling. But again, we have faith long term that China and Macau will do quite well. But it's been a very challenging couple of years, not just in the Trump tariff era.

Okay. No, that makes sense. And maybe just you sort of beat the elements of deglobalization risk. Maybe if you can just talk to that. You're a U.S.-listed firm, operating primarily in Asia.

Not primarily, 100%.

Sorry, 100%.

Not primarily -- we are a Singapore and Macau-driven business and...

Do you see any risks associated with that relationship? Or do you think that you're seen as a local business?

Even from a China perspective or how investors view us, no, I think -- I mean, we'd love to be in the U.S. at some point. We have tried and failed. But I don't think there's much risk associated with not being having a business here. We had obviously built and started in Las Vegas 30 years ago with the Venetian, sold that to Apollo and VICI a while back. But no, I don't think there's any real risk not being in the U.S. It'd be nice to be here from a different -- from a -- as a U.S. citizen, it'd be nice to be in the U.S. again.

What about the sort of side of, do you see any sense of kind of an anti-U.S. sentiment weighing on your business within Macau or Singapore?

I've not. I think we have been very fortunate. We've always been treated well by the Macau government and by Beijing. I don't sense that. Is there a U.S. -- anti-U.S. sentiment in Europe? I was in Europe. I felt it very strongly. Number of people made comments but I've never seen it in Beijing or Macau affecting -- or Singapore. I think more about -- just more uncertainty what -- where we're going as a country and who we are in the world. I think there's more uncertainty about the U.S. than anything else. It hasn't impacted our business at this point. No.

Okay. Let's dial in on Macau and then we'll swing back to Singapore. You mentioned it earlier, visitation levels still down on where we were in 2019. Is that macro? Is there anything structural going on there? What's your sort of optimism that things can get better in terms of?

Well, actually, visitation in Macau actually is pretty good. In fact, it has recovered. The problem is the spend is different than it used to be. Yes. The visitation used to be equivalent to the spend. But that's -- they've decoupled now and visitation can be pretty good but the spend isn't. So the market is kind of -- it had a nice rebound there post-COVID [ 15 to 18 ] and then to [ 22 ] and then it's kind of peaked to [ 27, 28 ]. And right now, appears to be flat at that number. We'll see how May comes out. But there's not -- we had -- I had a false belief a couple of years ago that Macau would just keep moving up into the [ 30s ] and beyond. I think there's a couple of factors. It's consumer sentiment. Obviously, there's global economic issues, the tariffs don't help. But it's also just -- there's other factors we can't determine how much is tied to online gambling in Asia. And it's -- whatever reason you want to assign to it, Macau has definitely stalled out. It's not where it was. Obviously, pre-COVID, the demise of the junket segment didn't help. And the competition is fierce there. And I think long term, I still believe Macau will be in the [ 32 ] and actually [ 34 ] and -- but it's not happening imminently. It's not happening today or tomorrow. So we are kind of struggling in Macau. In fact, visitation has recovered but spend has not.

And then just your thoughts around the recent holiday travel in China with Golden Week and...

Yes, it was a very powerful -- May is going to be, I think, I haven't seen numbers, obviously, not out yet. But I assume May will be a very positive outcome for the year. GGR in Macau has looked very good, I think, up single digit but up. And clearly, we saw a strong Golden Week, the whole market. You saw the numbers come out. Visitation spend, it was a very -- in light of what's happening in the world, I thought May is a pleasant surprise and Golden Week was very strong for the whole industry.

So is that -- that's a sign that things are getting better?

Yes. I don't know. It ebbs and flows. Tuesday looks better and Friday looks worse. And there's no consistency. Again, I'd plead guilty to believing the market would have a steady ascent into the $32 billion and $34 billion GGR range and hasn't, I was wrong. I think it will. I think inevitably, the power of the Chinese markets -- it just -- it's the most powerful market -- land base in the world. It will recover. I think it's actually pretty impressive in light of the economic numbers coming out of China, retail and other businesses, how well Macau has held up in this rather difficult time. Look at the retail numbers, luxury and other, they're pretty soft. So I'm hoping for a better day and we've got to do better within the parameters of the market today. We've not done as well as we could have done competitively. And our last quarter was disappointing. So we're hoping for improvement in our operating philosophy and our operating approach to accelerate our own EBITDA within the confines of today's Macau market, which is not the frothy [ go-go ] [indiscernible] market was pre-COVID.

And then in terms of sort of regional breakdown there, is the weakness coming from all over China? Or is the sort of the neighboring provinces stronger high end versus low end, the sort of VIP is softer.

I don't think you can break it out that way. The market has changed. The demise of the junket segment certainly drove more people into the non-rolling premium mass segment. But I think the weakness in the base mass has also impacted. But I don't think it's regional as much as just China is just in a different place than it was in 2019 and the business of Macau is in a different place than it was. So it's a myriad of factors but the aggregate result is a more challenging market to operate in.

And then what about Macau as attracting visitors from outside of China? Like is that an opportunity? I guess it's been primarily a Chinese market for you but is there a way to promote that to the wider world?

When you visit -- I've been all over Asia. I've never seen a place as, I think, compelling for the Asian customer as Macau is. It really is. Sheldon once said, it should be Las Vegas. I think it's morphed into that. It's an amazing place with great accommodations, great food, entertainment. It has the whole package but it has not been as attractive to non-Chinese visitors as the government would like. I think that's a cultural issue. I think it's also just a China issue. But I think inevitably, Macau is just too potent and too desirable not to increase and grow its audience in the years ahead. I think it will become more powerful for the international visitor. I believe 100% Macau will get stronger and stronger for Japanese, Korean, Indonesian, Malaysia. It should. It should be. Like Singapore, it should be much more attractive. But there's been impediments. I think the airport now being accessible by the road makes a lot of sense. The old days, the ferry was difficult. But it hasn't grown as fast as I think it could and it will.

Okay. Wonderful. And then maybe let's talk about -- it's a softer market but you've been investing. You're making a considerable amount of capital investments into Macau. What kind of returns are you expecting on those? Those are completed now. Is that right? And what...

Londoner is fully open. We never stopped. I mean, Macau is like the old Brooklyn Bridge joke, it needs repainting all the time and you start and you stop. So we're constantly doing R&M on the Venetian now and the Parisian. Four Seasons is done. The Londoner is done but we're constantly investing. We believe in Macau long term. We believe in asset-based strategy, which has not performed as well as we hoped it would. But we do believe long term that in the end, great buildings drive returns and will be rewarded for the investments we made. We're the biggest investor in Macau. We've not been rewarded with the returns I'd like to see. I'd like to see us do a lot better. I think Londoner will do very well. I think this quarter, you'll see some good results of Londoner. But we still remain believers in investing in quality and scale and that will never change. Singapore, the same way. We said wait for a better day in Macau and also help ourselves by performing better, by operating better. I'm going over, I think, 10 days now, I'm in Macau. And the whole week is about how we increase our visibility, our positioning, our incentives to drive more EBITDA into our buildings in Macau because we've been outperformed by other people.

Okay. And then hotel capacity in Macau still?

Strong, very strong. It's not about filling rooms in -- there's no trick to filling rooms capacity-wise. It's about quality of customer in the room. You can sell every room in Macau. It's not an issue. It's getting the right people and let's face, it is still driven by gambling, not by ADR or by hotel rate. It's driven by the right gamblers in the market. And I think we've got to work harder to make sure that mix is more favorable to our results where we want to get to.

And is there scope to add more properties in Macau, is it over in -- I might be pronouncing this wrong [indiscernible]

[indiscernible] Yes. The government has made this -- I don't think you'll see gaming properties mentioned. I think you might see more hotel properties. There is obviously more room in Macau. There's still the old site adjacent to the Londoner which is vacant. If the government wants to add capacity, it could. But in this market, I don't think they'll opt for that. It's not the right time. They would like to opt for more nongaming hotel-based facilities. That would make great sense. But I don't see gaming hotels opening in Macau anytime soon.

Is nongaming of any interest to you at all?

Yes, yes. No, we need more -- everybody needs -- well, it works in tandem, doesn't it? Nongaming brings gaming. So when you have sleeping rooms, they bring gamblers and they bring more people to retail and to food and beverage and entertainment. So absolutely, nongaming is essential to drive the gaming business. And the demand for Macau is there, the supply is too small. Las Vegas has what, 160,000 rooms or so. And so Macau is much -- 25%, 30% of that. It could use more sleeping rooms because it's got the biggest market in the world. It's got China at its doorstep with 1 billion plus, 1.3 billion. No question in my mind that more -- if you had more sleeping rooms in Macau of every type, it can be base mass, it can be super high end, super high -- every type of room is valuable to driving more gaming revenue. Sure.

And would you ever see an opportunity in Mainland China?

We've looked -- as I recall I came in here about something we're looking at doing in Mainland China investment. Obviously, not a gaming investment. It'd be more strategic. And we've always looked at China as maybe. Hard to find the right thing though that fits in with what we do and can be helpful to our Macau properties. Hard to -- it's not easy.

And then I just got a question here from the audience but obviously, kind of going back to Vegas, where profits have increasingly come from nongaming activities. Is that something you expect to take place in Macau as well?

Well, Macau always has been very strong nongaming. The retail revenue there is astounding. Our mall business, not recently but what's happened in retail in general. But typically, our nongaming business in Macau is extraordinary. It's probably over $1 billion of EBITDA between retail, restaurant and hotel occupancy. It's a huge business, just like Las Vegas. The difference is Las Vegas was gaming-centric and then became a nongaming market with the advent of higher room rates and the realization that we started 30 years ago when Sheldon first prophesied that there'd be a convention-based nongaming value, people fell down laughing at us. We opened The Venetian in '99 and room rates skyrocketed. And I actually was accused once, you're not really in the gaming business, you're in the hotel business. I almost went to jail for that in Las Vegas. But the truth is Macau and Las Vegas deserve high occupancy, high rate because they offer a product, which is -- it can't be replicated. They'll never be another Las Vegas. They'll never be another Macau. You can't -- the $50 billion, $60 billion, $70 billion that's been invested in Macau in the last 20 years is unbelievable. And Vegas has become a juggernaut of investment and it's a one-of-a-kind place. Like it or not, you may like Las Vegas, you may not like it but it's one of a kind. It's a unique property, unique place. And Macau, very similar. It's just smaller in terms of scale but newer. And Macau is very impressive. where it started from back in the '90s to where it's at today, it's an amazing progression of quality and quantity.

And then just another question from the audience here. What would need to happen for spend per visit to recover?

That is the brightest place you've ever seen. I think [indiscernible]

It was my second one.

I think I was asked where I was on Friday night, when they -- we got killed.

We want to...

So unbelievable.

We're trying to interrogate you.

I know I never stay there. I always, like one of the movies, like I'm sorry, the question was.

It's probably helpful. I can look at you, you have to look at the audience. What would need to happen for spend per visit to recover? Is it purely just Macau and Macau.

I think it's like a better economy would help it, a better confidence level. I mean the world is in a awkward place, I think, right now. There's confusion about the bilateral relationship, China and the U.S. There's confusion about the tariffs. There's confusion about China's trajectory. I mean it's not an easy place to navigate. And I think a lot of consumers here in the U.S. and in China are baffled or concerned. What is the trajectory of these countries and what's going to happen? I believe if you have a relationship with China and the U.S., working together, the world economy suffers. We all suffer. This ridiculous idea that we're going to make -- we're going to exist on our own is insane. I mean we've got to have a trade. We've got to have a relationship with China and we have a relationship with the world. I mean we're not -- it can't be America only or China only. So I think the world is kind of watching, waiting, concerned, you see it in equity prices, you see it in people's consumer confidence, see it in their spending habits. I was with a friend of mine who owns a lot of retail here in New York. It's tough. So I think until people get more of a certainty of what tomorrow is going to bring and it was going pretty well until this whole -- it's painful to watch the U.S.-China relationship not be stronger. It needs to be stronger for all of our benefit, not just this country, not just China but Europe and the rest of the world benefits when China and U.S. work things out together. And hopefully, there can be resolution. President Trump and President Xi can figure that out.

Very clear. Right. I'm going to ask you all the same questions again, Singapore.

Singapore is very different.

Yes. Well, maybe let's set the scene then. So tell us where we are in Singapore.

Well, we're -- life I'd cycles and those of us who lived long enough know things change all the time. Singapore is in a wonderful place where it's all going very well. And it's going well for a lot of reasons. One, I think it's probably become that magical city place in Asia that attracts a very high-spend, high-frequent person from all over Asia, whether it's Indonesia, Malaysia, Korea, China. We're getting all kinds of people in Singapore. It's very desirable. There's a lot of private wealth gravitating to Singapore. I mean the price per square foot in real estate there is astronomical. The market is hot as a pistol. And to be honest, we have a duopoly but we have the best of it, as you can see from the lopsided EBITDAs we're making there versus our competitor. Our competitors, they're great people and they've done some nice things but they've not achieved the kind of EBITDAs we have. And I think our last quarter was in excess of [ 600 ]. I expect to see more of that in the future, [ 600 ], maybe [ 700 ] in the future. Our business in Singapore is powerful and it's not based on a multisegment. It's based on very top-tier luxury segment of customers. It's a small hotel. We've downsized the room count to focus on the super high end. And it's -- the numbers there, even the retail numbers in light of a difficult retail environment are very strong. The gaming is very strong. Our base mass, our slot business is trending at $1 billion top line this year, which is astounding. Singapore is in a privileged place and I don't think it gets it goes nowhere but up at this point unless something terrible happens. It seems like it's a shining market in all of Asia, attracting the wealthiest and the country and the government have been exemplary. I mean they're great to deal with. And we break ground on there, I think in July, we break ground #2, which will be open probably sometime in early part of the '30s. But look, Singapore is -- I wish Sheldon has seen it. We built Singapore for $5.8 billion. And the guessing was, could it do $300 million, $500 million, $1 billion? The fact it probably will get to $2.5 billion run rate this decade is astounding. And the post-COVID trajectory of GGR in that market is astounding. Our business is terrific and we're thrilled to be there.

And obviously, $600 million of EBITDA from one property is pretty extraordinary in the hotel world. And you're adding a second property. Obviously, you mentioned it there. Maybe just give us some details there. It's not quite marina, makes sense to -- it's a little bit more modern.

No, no. It just costs more. It's very extravagant. My friend's hotel business always laughed at the cost per key. It's only 550 keys. It's cost in the somewhere in the $8 billion range. I know it sounds very expensive because it is. But I also think the market there will pay for that kind of product. And again, you're targeting an uber upscale audience that gets to Singapore and wants to be in Singapore. It's a very seductive place for a lot of reasons. And we have total confidence in it being a very successful project. But again, the fact we are open for probably 5, 6 years.

Maybe just a question again about the nongaming revenue in Singapore. Is there faster growth? Is there more opportunities to drive that?

There's higher spend per room. There's higher spend per square foot retail. Singapore is just the home of -- whether it's retail, restaurants, entertainment, everything, price is higher. I just bought a room for somebody as a gift. When I got [indiscernible] I was astounded in Singapore how much does it cost for our base room. But the fact is Singapore is for affluent people that can afford it, whether it's the gaming product, the hotel product, the retail, the food and beverage, everything is expensive. But I think it's well received and people think it's worth it. Again, we shrunk the key count to be more focused on a very specific customer. It's paid off very, very well. Our strategy in Singapore is very good, not as good as what we -- obviously, we're not as happy as our numbers in Macau. But Singapore has been an unqualified success the last couple of years and I think it just gets better.

And one of the trends we've seen in Singapore is this side bets, prevalence of side bets. What is the sort of upside opportunity from that? Maybe you can sort of talk about where that came from?

Yes. So gambling, if people understand side bets, they get very emotional about what it means. It's very simple. There's just higher risk to the customer and higher reward for the house. And we've always been a proponent in making side bets in the -- we're a baccarat company. Dan Briggs always calls us the ABC, the Asian baccarat company, which I love that because it's mostly true. We have a lot of hotel rooms and restaurants and retail and all that. But in the end, what drives our company's success or failure is baccarat. So the baccarat game, as you may not know, has for years been a rather boring 2.7%, 2.8% house advantage. If you're a flat betting house, advantage is miniscule, if you're flat betting banker player. The minute you add derivatives, side bets, they're bad bets for the customer. Let's call it what it is. They're high reward if you hit one but they're high risk. My father-in-law played the lottery every day for about 2,000 years. I don't know if he ever won. But I don't think so. He never told me he did. But I think these bets are akin to -- they're prop bets. You watch the Super Bowl and you can bet one team or the other, that's fine but you bet the prop bets. Sports betting today is a bad bet for the companies, for DraftKings, Flutter, et cetera, the flat bets when you bet the Cubs versus the Phillies, not very exciting for the house. The money is in the side bets. That's -- that's true of any industry, in gambling. And what we're trying to do in Macau and Singapore is create more prop bets, side bets that people may gravitate to. It's higher house advantage. It's very important to driving that. And when you're doing in billions of dollars of money we take in from revenue from baccarat, if we can drive the perf from, let's say, it was [ 2.7, 2.8 ] for years, now it's at [ 3.5, 3.6 ]. Prop bets are wonderful. I remember being a young guy in Atlantic City 1,000 years ago and I worked for a guy who was a finance person, didn't understand gambling at all. We had a customer who wanted to bet the tie. In those days in Atlantic City, the tie was -- he went at USD 100,000. And the guy I worked for panicked. He said, Rob, you can't -- it's crazy. You never -- you should take all that you can get because it's such a stupid bet. If he's dumb enough to make it, take all you can take. And he said, well, what does the customer think? I said, that's the customer. He's hearing me. I'm telling it's a dumb bet. He wants to make the bet, it's up to him, not you, take the bet. The prop bets are like that. They're very advantageous to the house, not for the customer. And we're trying to find ways of -- and the whole industry is doing this. They're trying to find people that -- we field all kinds of different games, side bets, different names. But in the end, it's about giving the customers what they want and when they bet on that adds more advantage to the house. So right now, the -- you saw last month, we announced Singapore is up to 3.7% hold. If that hold keeps going, the value to us is incalculable because nothing changes. The CapEx doesn't change, the dealers don't change. The costs remain the same but the house advantage drives your winnings and your flow-through on the EBITDA is considerable. Also, this is enhanced by the smart tables, which have taken over the industry and rightfully so the smart tables give you multiple advantages. They give you great security. They also give you the fact you know exactly what the customer is betting. So imagine if you know your customers' habits, the point where it's not done for you, not a pit boss or a floor man writing it down. If he has a bad bet, he doesn't pay attention, you lose the bet. This way, you know exactly what the customer is wagering, you can then calculate the value to you based on his wagers. A flat better is not nearly as valuable as a side better, same in sports betting, same in anything. So I think the smart tables have been hugely advantageous but also enable us to offer more side wagers. They can make the felt change and the side betting is enhanced by having smart tables. So the advantages, I think, for baccarat is, over the time we've been experimenting with it, we've driven the pur up. But the fact is it could get as high as 4-plus percent, which would be astronomical for a company like ours. And that's a real hidden value of our company because, again, we are the ABC company.

And why is this an opportunity in Singapore that doesn't seem to be as much of an opportunity in Macau?

It's equal. It's -- Singapore, it started there a little earlier because the regulatory environment allow us to do things there and try it. But it doesn't matter to me, Singapore, Macau, even Las Vegas, the customer dictates what they want to bet. You make the offer and let the customer tell you. You're going to see a side betting in Macau become very important. It's very important in Singapore. But the markets in me are very similar. I know people think there's different habits. I don't believe. I think in the end, a gambler given the option to gamble will pick -- look at the table and make his own decision. But in the end, Macau and Singapore are very similar in terms of appetite for side wagers.

And then what synergies do you see between being in the 2 locations? Like how many cross guests do you have across the 2 locations?

We have a lot, but we don't really -- because of the way the laws are set in Macau, we don't cross market as much as you think. We're not able to share information and data. We're very careful to isolate Macau at the request of the government. So the cross-marketing is important. I also believe that's overstated in terms of -- the customers are intelligent. They know where to go, where they want to go and they'll -- they -- most Mainlanders will prove -- will choose Macau over Singapore but the greater Asia region will choose Singapore over Macau.

Okay. Okay. That makes sense. You mentioned earlier, in Singapore, you're doing better than competition. In Macau, maybe more recently, you've seen the competition do better than you. What determines who's winning there? What are they doing better? Or what are you doing better? What's the [indiscernible]

[indiscernible] I look at the EBITDA numbers and I get -- it bothers me. We're not doing as well in Macau as we could. But in the end, what drives it in Macau has always been a market predicated on product, on rooms and quality and food and the gambling is always just -- the product drove the revenue. What's happened is it's a much more incentive-driven market and much more direct incentives to the customer, which we've not played that game as well as others have. And my hats off to them. I'm not here to -- I'm here to say they're right and we're wrong. We need to be more aggressive. It may cost us the margin but we don't -- margin -- no one at the bank ask for the margin. They ask how much money you have. So we make more EBITDA, we'll be happier than making higher margins. So we got to rethink who we are and respect our assets but also respect the customer is being sought after by many different entities and you've got to compete and you've got to be market sensitive. And frankly, we haven't been. We haven't been good enough. And our Macau numbers are disappointing to me. And as good as Singapore is, Macau should be doing better. If Macau is doing what it should be doing, we'd be in a $5.5 billion of cumulative EBITDA, which will put us where we want to be.

So maybe just to square those comments. So you're saying that the quality of the product is marginally, a little bit less in Macau but you're investing in upgrading your products.

Well, we're always going to upgrade. But I think we've not gotten the payoff that I expected. I was wrong. I thought people would -- the product would drive it. What's driving is, product is important but equally important today is incentives against the customer direct incentives, cash and discounting and things like that, which are not margin positive but they're EBITDA positive, if you do them right. And look, you can -- we sat back thinking this would change and we were wrong. I was wrong. We can pontificate what people, how they should run their business. But if they're making more money than you, then shame on you, then get in the game and stop complaining and that's what we need to do. We need to be more aggressive in Macau, making more money and that's our driving force in our company, which has been. No one pays you for margin. No one pays you for pretty buildings if they don't produce EBITDA.

Fair enough. And then maybe just a comment on what products are resonating at the moment. You've got a kind of range of branded products, very, very high-end, sort of exclusive products. You've got some themed products. I think it's fair to say. Obviously, in Macau, you've kind of gone down the route of just high-end luxury. What is the product that kind of most resonates? Is that very different between the 2?

I think you can do theming in luxury. I mean the Londoner is the embodiment of both. It's a heavily themed product. I mean you can't -- you call it the Londoner, you're kind of the theme business, aren't you? But I think we've also done a great job executing on multiple levels of hotel excellence and it's a bizarrely good product. It's as good as it gets. And I think -- whereas Singapore is much more of a nonthemed architectural icon type product, which is also nonthemed but very luxurious. And the Four Seasons in Macau is same thing, nonthemed uber luxurious. But our mainstay has always been the Venetian, which is heavily themed. And some would say theming is a negative thing. It depends on what markets you're in. It worked very well. We've invested, I think, $2.7 billion or $2.8 billion in Macau in 2007 to open the Londoner -- I mean the Venetian has made, I don't know, tens of millions of dollars since that, tens of billions. So clearly, theming works in some markets. And it depends what your -- in Vegas, the '90s theme was essential. Sheldon and I once went to a dinner with a bunch of investors and some guys said, "What's your theme going to be in Las Vegas, Mr. Adelson? " My theme is making money. He said, I'm in the moneymaking theme. And whatever goddamn thing it takes to make money, I'll do that. And it was very fun. The guy got very offended and he said he's very [ course ]. I tell you, you haven't seen [ course ]. That's not. That's an appetizer. He's a tough guy but he was right. He said the theme will work. And we landed on Venetian because we thought at that time that probably 99% of Americans who didn't have a passport have been to Venice. So we created this make-believe fancy what Venice was. It was beautiful and it was a great success. There were those who thought theming is antiquated. I don't subscribe to that. Londoner just opened and it's themed. It's very well done. It's not kitschy, it's very fun. I encourage you to go see it because I think it really executes well.

Maybe just moving on. We've got a couple of questions, quite similar ones from the audience. Initiatives such as NBA's preseason games in Macau. What are the hurdles left for Sands to move into sports?

No, no, we're going to -- we're doing an NBA game this fall. No hurdles. We made a deal with the NBA. Patrick owns the team in Dallas and we're moving forward to doing NBA in Macau, which is very desirable there. People want to see the NBA. Years ago, we did a deal with ManU for a football -- English football game there and all people told us no one wants to see English football. So we didn't hold enough tickets for the casino and we put them on sale next day and all 20,000 tickets were gone in 20 minutes. And I said, yes, that tells us how much we got our own customers. They do want to see football. They do want to see NBA basketball and we're giving them that. We're doing a lot of NBA games. I think we're doing 6 or 7 next couple of years. They have a voracious appetite for sports over there. Yes. So we'll keep doing all this, entertainment, NBA, et cetera.

But what about particularly sports gambling?

Sports, I don't think that's in the cards right now. I think there's a sports gambling group. I think it's been there for years but it's not material and we've never offered to be in that business. Of course, we'd love to be. But I don't think sports betting is going to happen in Macau in the foreseeable future beyond the small -- there's one outpost right now, I forget what's called, that does it in a very minor way. But on a major scale like Las Vegas, no, I don't see it.

Okay. Okay. And then what about company's long-term thinking in online gaming? Is this an opportunity for you?

It's very difficult for us online. We've tried. We've looked at many things. We're experimenting with something right now. The problem is, we're late to the game. Online is very complicated and very competitive, very hard to breakthrough. So I -- we really did try but I don't see at this point other than maybe a couple of things looking at a real path to an online presence. Plus it's painfully expensive to get into. And at this point, people lost a lot of money trying to be -- it's not an easy business. Sports betting has turned out to be a -- not profitable at this point. And online is only in a couple of -- it's like 4 states in the U.S. I don't see us being able to compete easily in the online space. It's very complicated, very big and a lot of the first movers way ahead of us.

Okay. What about -- you talked about smart tables earlier. I mean maybe you can just talk about maybe what is a smart table. That would be interesting for some people. And really, what is that enhancing for you? You're talking about the side bets. Is that more...

It's incredibly good for the industry for a couple of things. Smart table is nothing more than -- you've got the ability -- the table -- smart maybe the wrong term, it's really more of a technology approach where you can see all the hands. And for example, counterfeiting chips and cheating has always been part of the landscape in the gaming world. It eliminates that. If you bet a counterfeit chip, the game will stop right away and the guy can be arrested or whatever, put in -- or taken aside. So counterfeiting, it eliminates that. It eliminates cheating because you can see everything is being recorded, all the hands. If someone is playing games, the dealer internally or externally are working together, it eliminates all cheating in that. It's a fabulous tool for that. The most important thing it does though is you know your customer, the data acquisition is amazing. You can know what a person bets on every hand and how much they bet, what they bet because once you bet, a person betting a lot of money on a flatbed is not nearly as important as a person who bet a lot of money on a nonflatbed or a side bet. So how they bet, propensity, the size of bankroll, how long they sit at the table. It gives you a perfect rating system to give complementaries back to them. It also gives you a chance to market to them on the game directly and offer all kinds of side wagering. It's very complicated. The layouts can be much more complicated. It takes the pressure off the dealer, the floor man, the pit boss to watch the game. The game basically watches itself. And it also makes sure all the fills, everything is done properly in terms of the accounting on the game. I mean they're expensive machines but they're going to revolutionize gaming. And I think you'll see them -- it will be in every place in a short time. They're too important not to be, especially in a high-volume environment like Asia.

And what is the rollout as of the moment?

We're basically done in this year in both jurisdictions, Macau and Singapore.

So [indiscernible] there, hopefully or they're where you want to be.

Yes. No, they're doing great. And the reception -- customers like them. I think there's a sense of comfort, there's a sense of awareness. They get the raise done properly. Customers seem to gravitate to smart tables.

Okay. Wonderful. What about -- is there any other innovations, technological innovations, maybe on slots or anything on the other side that you're going out.

No. Basically, a smart table -- table games emulates the slot experience. It gives you the ability to process information -- it's basically a slot machine's table game. It gives you incredible -- in the old days in Atlantic City, 100 years ago, people put coin machines. It was a very old school approach. That's all gone now. Obviously, the slot machine business moved much quicker than table games. It's only recently, last 10 years, table games have started to catch up from a technology perspective. And I think the smart table is the epitome of that technology, which is both valuable for security, counterfeiting, rating customers, new bets. It's a amazing progression in the right direction. And especially in Asia, which is table game predominant.

So let's move on to sort of new opportunities. I think I'm...

Short meeting.

Well, maybe to start with maybe the framework then. I think you target like a target return on invested capital of 20% if you were to find new projects. I mean...

We have in the past. That may be ambitious in this market today.

Yes, I was going to -- I guess, if I very quickly try and do the math on what you said about Marina Bay Sands, it's a great property. It's not making 20% on the $5.8 billion.

No, no, making much more.

It's making more.

Well, it's making -- I can't do the math but $2.5 billion, let's say, $2.4 billion on $5.8 billion.

[indiscernible]

Look, it's been an amazing investment. And so is Macau. The problem today is in the world, those opportunities are short. There's nothing for us in Europe. The U.S., we just left New York, which may have been one of the great last opportunities. There's nothing happening in Texas right now. The only thing in the world to interest us in Asia would be Thailand, which is -- we don't know what's going to happen there. It's really early days. But Thailand would give you, I think, a chance because the CapEx, OpEx in Thailand is huge advantage to the operator. If you've been to Thailand, the numbers are spectacular. I saw a project there that looks like Hudson Yards here, except it cost $4 billion versus whatever Hudson Yards cost, which I assume is more like $14 billion or whatever it was. But you can build cheaper in Thailand, you can operate cheaper. If they can get the legislation right, that's going to be a great market for somebody.

And what about Singapore? Is 2 properties the right number then? Obviously, you're building the second one. Could there be a room for third? Or is that very hard to predict?

I wouldn't talk about that today because I think we get to # 2 is enough. I don't think the government has any interest in growing beyond that right now. We'll obviously let the government dictate that. But I don't see Singapore growing beyond our 2 properties and again, these 2 properties for a long time.

Okay. So with limited opportunities out there to grow.

Yes.

Capital allocation, you obviously invest -- reinvest and upgrade the properties. So you're looking really to capital returns. You're seeing a [indiscernible]

Yes. If we don't find other opportunities, we're going to be making billions and billions of dollars with no place to spend it. So we'll simply put it back, obviously, fix the houses, fix the properties but then put the money back to investors. The dividends or buy back shares. We've been buying back shares aggressively. We keep buying back shares and we'll keep doing that until the price gets better or maybe beyond that. But we have a -- the days of us thinking there's endless opportunity to grow are over. I don't see any place other than Bangkok right now for our company to grow, put money to work anywhere near the kind of numbers you were talking about, 20%. I think Bangkok will be a very, very solid return on capital. But I don't think there's any opportunity for us in Japan or Korea or Indonesia and the U.K., in the EU or in the U.S. I mean we're a company that's mature. We were once viewed as a very aggressive growth company. I think now become more of a make billions of dollars, buy back our shares and put it back to investors. I think that's the future until something comes along, unless Bangkok materializes, which, Bangkok still has a lot of hurdles to get to the finish line. I wouldn't -- I don't think Bangkok is a [indiscernible] to complete. It may not happen. We don't know.

So what are the hurdles in Bangkok, is it just [indiscernible]

Oh, god, how many hurdles you want. You've got to approve the legislation. It's got to be local friendly so the 70 million Thais can get in. At one point, they were insisting on a $1-plus billion net worth, which you actually show the casino had a $1 billion net worth. That's a pretty rare thing to do in Thailand. That would eliminate the local market. It will eliminate investment in Thailand. They've got to pass it. They've got to deal with the fact that I think the Chinese are waiting on [Technical Difficulty] there's a number of hurdles. What's the tax rate? What's the length of license? What's the admission for locals? There's a lot of hurdles. Thailand if it ever actually gets done. It's not done. It's in -- it's being considered. We've been there multiple times but I wouldn't call that a sure thing.

Okay. Okay. Makes sense. Maybe just to finish off, you're sadly stepping away from the CEO role, I think you said you're going to stay there for 2 years as a consultant.

I stay until March and then I have a little consulting contract.

Consulting contract beyond that. I mean what would you say are they going to be the priorities for your successor at LVS? What would...

They're no different than we just talked about. There's finding what do you do with the company, it makes a lot of money but has limited growth potential and having to deploy capital. And if you can't deploy capital, what do you do with it? How do you help investors get there? I think the truth is, sitting here today in May of '25, it looks to me like the landscape is pretty predictable for anybody, whether it's Patrick or anybody else in this job, it's going to be very much a capital allocation story. You have a wonderful amount of money coming in. And the question is what do you do with it all? And I think the answer is, at this point, fairly predictable and you buy back shares and you put money back to investors in the form of dividends or whatever. I don't see us -- yes, Bangkok is interesting but after Bangkok, nothing is really out there we can talk about with any kind of certainty. So -- and the way we do our business, the size of these things, the scale, very hard to find opportunities for us. There was a time I thought we'd grow in the U.S., we'd grow in Asia but I don't see that today. So the big question is, what do you do with a company that makes, let's say, $5-plus billion, has no real need for the money. You buy back shares and you do dividends, I guess. Not very hard to figure out.

Okay. Well, on that simple note, I think we'll wrap it up. Rob, thank you very much for your time.

I appreciate that.