Sands to enter online gaming
By Howard Stutz
ALDERNEY AND LAS VEGAS, Nevada -- Las Vegas Sands Corp. will venture into the world of online gambling through a partnership with fledgling wireless-gaming device provider Cantor Gaming.
The casino operator announced Monday it will offer its gaming property brands -- Venetian, Sands, Palazzo and Paiza -- to an online casino site targeted toward gamblers in the United Kingdom. Cantor, an affiliate of New York-based financial services company Cantor Fitzgerald, will manage the site, which would be licensed out of Alderney in the British Channel Islands.
Both Las Vegas Sands and Cantor Gaming said safeguards would be built into the site so that wagers from U.S. citizens would not be accepted.
Financial terms were not announced, but sources familiar with online gambling said the companies would likely share any revenues the Web site generates. The yet-to-be-named Internet site is expected to launched by the middle of next year.
The move by Las Vegas Sands and Cantor Gaming comes about two months after Congress passed legislation to try to halt Americans from wagering online, an estimated $12 billion a year industry. President Bush signed into law Oct. 13 a provision that makes it illegal for banks and credit card companies to settle payments from online gamblers in the United States to online gaming sites.
Las Vegas Sands is not the first casino company to explore online gaming. From 2001 to 2003, MGM Mirage ran an online gambling site licensed on the Isle of Man. At the time, company executives said the involvement in the Web site, which didn't accept wagers from U.S. citizens, was a way of proving online gambling could be regulated.
MGM Mirage spokesman Alan Feldman said the company ended the venture "because it wasn't a sustainable business model" without the participation of American gamblers.
Las Vegas Sands is viewing its partnership as a way of expanding into the United Kingdom, where the company hopes to gain a potentially lucrative license for a Las Vegas-style casino.
"This is another opportunity for our company to create greater awareness of our global brands and further establish our presence and interest in the United Kingdom market," Las Vegas Sands President Bill Weidner said in a statement. "Additionally, as the Internet gaming landscape continues to evolve, this effort will put us in a strong position to evaluate and react to other potential opportunities."
Deutsche Bank gaming analyst Bill Lerner said an Internet gaming venture allows Las Vegas Sands to put its casino brands in front of a different audience.
"This is a painless and profitable way for Las Vegas Sands to get those brands out there on a global basis," Lerner said. "I'm not sure if it will be a huge contributor to revenues, but it's a way of monetizing the brand a little bit further."
Cantor Gaming, which was licensed in May by Nevada gaming regulators to operate hand-held or wireless gaming devices in state casinos, already operates an online gambling site in Britain for the publisher of FHM magazine. The Web site doesn't accept wagers from American citizens.
During the licensing hearing, Cantor Gaming executives outlined some of the safeguards in place in ensure that Americans can't wager on the Internet on any of the company's Web sites.
Gaming Control Board Chairman Dennis Neilander said Monday he was aware the companies had been discussing an online gambling arrangement. Operating and collecting revenues from an online casino is not an issue, he said, as long as the two companies report the dealings to gaming regulators.
"When the system is set up, we'll test it to make sure that they can't accept wagers from U.S. citizens," Neilander said. "That's the main concern."
This is the not the first partnership between Las Vegas Sands and Cantor. Soon after it was licensed to operate a mobile gaming system, Cantor Gaming announced Las Vegas Sands' Venetian would provide the Cantor devices to its customers.
Although Cantor has struck agreements with slot machine manufacturers to use their content on the games, the company's particular devices and technology have still not been approved by Nevada gaming regulators.
Shares in Las Vegas Sands surged Monday on the New York Stock Exchange, not so much on the news about the Internet venture, but in reaction to Station Casinos announcing it may be taken private, gaming analysts said. Las Vegas Sands closed at $97, up $6.30, or 6.95 percent.
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