This week’s Inside Gaming shares news of the Las Vegas Sands paying big to end an SEC probe into its machinations in China and Macau, tells how efforts in Maine to build a casino have been thwarted by a judge’s ruling, and imparts some good news — for once! — regarding Atlantic City’s casinos.
Las Vegas Sands Agrees to Pay $9M to End SEC Probe
Following a lengthy, five-year investigation by the U.S. Security and Exchange Commission, the Las Vegas Sands Corporation yesterday agreed to pay more than $9 million as a civil settlement, thereby putting an end to the probe into whether the company had broken a federal anti-bribery law after paying a consultant to help them in China and Macau, Reuters reports.
The charge concerned whether the Sands might have “violated the Foreign Corrupt Practices Act by failing to properly authorize or document more than $62 million of payments to the consultant, known within the company as a ‘beard,’ between 2006 and 2011.”
According to the SEC, the consultant had essentially performed as a deceptive “middle man” who tried to conceal the Sands’ attempt to purchase a Chinese Basketball Association team, something which gaming companies are not allowed to do. The consultant was also said to have been involved with an attempt by the Sands to buy part of a building in Beijing despite the ban against casino gambling in China.
There were also transactions concerning the Las Vegas Sands’ operations in Macau that had not been propertly documented, said the SEC. The Sands owns several properties in Macau, including the largest casino in the world, the Venetian Macao (pictured above).
Despite the settlement, the company “did not admit wrongdoing, and said there was no finding of corrupt intent or bribery.”
The company released a response to the settlement that includes a statement from Chairman and Chief Financial Officer Sheldon Adelson.
“We are pleased to have the matter resolved,” said Adelson. “We are committed to having a world class compliance program that builds on the strong policies we already have in place.... We will build on this experience, which has reemphasized to our 50,000 team members worldwide the same values I have made the foundation of my seven decades in business — integrity and reputation matter.”
Notes Reuters, “the $9 million penalty represents less than two days of profit for the company.”
Visit Reuters to learn more about the probe and settlement.
Judge Affirms Maine Casino Question to Be Kept Off November Ballot
Last week we shared news of a new report from a national accounting firm noting how most casino growth in the United States — at least in the near term — is happening in the northeastern part of the country. You can eliminate the northeasternmost state from participating in that growth for now, however, after a Superior Court judge affirmed an earlier decision by Maine’s Secretary of State to reject a petition to put a question about building a new casino on the November ballot.
The Portland Press Herald reports how supporters of the casino campaign had hoped to have included a ballot question that “would allow Las Vegas gambling impresario Shawn Scott — and only Scott — to build” a casino in York County in the southern part of the state.
However in early March Secretary of State Matt Dunlap ruled the campaign had not submitted the required number of valid signatures for the ballot, citing “a number of irregularities, including voter and notary signatures that did not match signatures on file with the state.” That ruling was appealed by those mounting the campaign, which led to the Superior Court’s verdict this week.
“The casino effort featured an aggressive signature-collection drive that raised questions in some quarters about whether Maine needs to tighten and reform its referendum law,” added the Portland Press Herald.
More than 35,000 signatures were certified, leaving the campaign about 26,000 signatures shy of the needed number. The campaign can continue, with certified signatures gathered thus far still being usable until late next year.
Travel to the Portland Press Herald for more on the ruling and campaign.
Atlantic City Enjoyed Increase in Casino Profits in 2015
Finally, we stay in the northeast U.S. to share some uncharacteristically positive news out of Atlantic City, where a report released this week by the New Jersey Division of Gaming Enforcement revealed seven of the eight of the casinos on the famed Boardwalk saw their profit increase during 2015.
The report sharing 4Q and year-end results noted that total revenue among current operators increased 2.3% for the year, including a 3.1% growth in casino revenue.
Sorting through other details of the report, the Associated Press notes the casinos “saw their gross operating profit increase by more than 40 percent last year,” with a “collective operating profit of over $547 million in 2015.” As the AP explains, “Gross operating profit reflects earnings before interest, taxes, depreciation and other charges and is a widely accepted measure of profitability in the Atlantic City casino industry.”
The Borgata Hotel Casino & Spa was the biggest earner with nearly $216 million in profits (up over 36%) while the Resorts Casino Hotel enjoyed the largest increase, percentage-wise, with its $15.6 million in profits representing a huge 525% jump over the previous year.
The Golden Nugget was also up over 396% just $22.6 million, with Harrah’s Atlantic City (up 26% to $122.7 million), Caesars Atlantic City (up 39.4% to $83.4 million), and Bally’s Atlantic City (up 76.6% to just under $40 million) all enjoying increases as well.
The Trump Taj Mahal had operated at a loss in 2014 (of about $1.1 million), but it, too, enjoyed a gain in 2015 to just over $3.1 million. The only casino not to show an increase in 2015 was the Tropicana Casino & Resort which endured a profit decline of just over 22% for the year (from $59.8 million down to $46.4 million).
Following the closing of four casinos during 2014, many industry observers anticipated the remaining eight would likely enjoy some benefit from less competition. Thus the overall growth is notable, providing some hope going forward.
Responding to the report, Matt Levinson, chairman of the New Jersey Casino Control Commission described Atlantic City’s casino industry as “alive and quite well,” characterizing the increases as “an indication that the market is stabilizing after several years of turmoil.”
Meanwhile legislative efforts to allow for the building of new casinos outside of Atlantic City in the northern part of the state, a turn of events that some fear may be especially damaging to the gambling capital’s future.
Read more rare good news from Atlantic City from the Associated Press via Philly.com.