Las Vegas Sands (LVS) $16.7 Billion Lawsuit Rolls On
Las Vegas Sands is in court facing a US$12 billion ($16.7 billion) lawsuit from Macau businessman, Marshall Hao. Asian American Entertainment Corp (AAEC) alleges a breach of contract on the part of LVS, and wants compensation.
LVS and AAEC agreed to jointly apply for a Macau casino licence in 2001. Opening a Las Vegas-style casino, similar to The Venetian, was the ultimate goal. Studies showed Macau gamblers favoured such a lavish venue.
The Sands Macau and Venetian Macau opened their doors in 2004 and 2007 respectively. Both are massively successful, but AAEC never received a penny. Why? Because LVS terminated the contract and joined forces with Hong Kong-based Galaxy Entertainment. This contract later dissolved with both companies opting to go off on their own in a highly profitable market.
AAEC Wants $16.7 Billion Compensation From LVS
Hao and his AAEC company, rightly or wrongly, feel aggrieved. They claim LVS only received a licence due to his early consultation. Hao started legal proceedings in Nevada in 2007. However, a judge dismissed the case three years later on procedural grounds. Hao filed a claim for US$375 million ($521.2 million) in Macau in 2012. He increased this to US$5 billion ($6.94 billion) two years later. Another increase to US$12 billion ($16.7 billion) became apparent late last year.
The massive sum is 70% of the Macau-derived LVS profits since 2002. Some 60% of LVS’ revenue stems from its Macau and Singapore properties.
Earlier, Sands China CFO, Su MinQi, revealed the company ploughed US$15 billion into the resort. In addition, Hao’s claim does not take into account the huge losses of 2020 and the first half of 2021. The COVID-19 related closures and restrictions caused those losses.
Case Finally Hits Macau Courts
It took the best part of a decade for AAEC and Hao’s case to hit the Macau courts. Officials from the licencing department gave statements last June. Both agreed anyone partnering with LVS had a significant advantage in obtaining a casino licence. This is because a Las Vegas-style resort is highly desirable.
However, both also agree Galaxy Entertainment, at the time, has zero experience in running a casino.
“It is correct to say the Galaxy bid was selected mostly because of Las Vegas Sands, as Galaxy had no experiences in gaming at the time, while Las Vegas Sands had. What Macau needed at the time was to enrich its tourism offerings to attract more travellers, thus sparking the economic recovery.”
Building the casinos certainly helped Macau’s recovery. In addition, LVS became the world’s biggest gaming company by revenue within five years.
Lawyers Claim a Doctored Document
Lawyers claim AAEC doctored a crucial document, at a hearing this week. This is enough to thrown the case out of court if proven true. Those lawyers claim a memorandum of understanding (MOU) signed by former LVS president and CEO William Weidner and AAEC is not legal. Lawyers allege AAEC forged Weidner’s signature on the important document. AAEC deny the claims.
The judge requested a written testimony from Weidner regarding the document’s authenticity. Furthermore, AAEC has five days to present evidence of how it got its hands on the MOU.
Jorge Menezes is a lawyer on AAEC’s behalf. He explained why providing evidence is difficult.
“The majority of the documents used in this case have been copied from originals which none of us have had access to. I find it strange that only now this seems to be a problem for the defence.”
This is not the first Asian legal battle LVS has found itself in. Richard Suen acted as a go-between for the company and high-profile Chinese politicians in 2001. The meeting led to licencing. The American giant denied the claims, but a Nevada court sided with Suen.
Suen wanted US$346.9 million ($482.03 million) for his settlement. However, he received US$96 million ($133.39 million) according to the company’s next financial report.
