8-K
LAS VEGAS SANDS CORP (LVS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 16, 2022
| LAS VEGAS SANDS CORP. | ||
|---|---|---|
| (Exact name of registrant as specified in its charter) | ||
| Nevada | ||
| (State or other jurisdiction of incorporation) | ||
| 001-32373 | 27-0099920 | |
| (Commission File Number) | (IRS Employer Identification No.) | |
| 5500 Haven Street | ||
| Las Vegas, | Nevada | 89119 |
| (Address of principal executive offices) | (Zip Code) |
(702) 923-9000
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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| Securities registered pursuant to Section 12(b) of the Act: | ||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock (0.001 par value) | LVS | New York Stock Exchange | ||
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | ||||
| Emerging growth company | ☐ | |||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
All values are in US Dollars.
| ITEM 1.01. | Entry into a Material Definitive Agreement. |
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On December 16, 2022, Venetian Macau Limited (“VML”), an indirect subsidiary of Las Vegas Sands Corp. (the “Company”), entered into a gaming concession contract with Macao (the “Concession Contract”), under which VML was awarded a gaming concession for the operation of casino games of chance in Macao (the “Concession”).
Term of Concession
The term of the Concession is 10 years commencing on January 1, 2023 and ending on December 31, 2032. During such period, VML will be authorized to operate casino games of chance in Macao under the terms of the Concession Contract.
VML’s Obligations under the Concession
VML will be required to make various payments and comply with various obligations under the Concession Contract and pursuant to Macao’s gaming law (the “Gaming Law”), which include payment of a special gaming tax, annual gaming premiums, and contributions to a public foundation in Macao and to urban development, the promotion of tourism and social security. Pursuant to the Concession Contract, VML also agreed to make committed investment in various gaming and non-gaming projects. The following table sets out key payment terms and conditions of the Concession Contract:
| Special gaming tax | In accordance with the Gaming Law (35% of gross gaming revenue(1) as of the date of this report)(2) |
|---|---|
| Annual gaming premium | Fixed annual portion of MOP30 million (approximately US$3.7 million)<br><br>Variable annual portion(3) of: |
| –MOP300,000 (approximately US$37,291) per gaming table located in special gaming halls reserved exclusively to certain kinds of games or to certain types of players | |
| –MOP150,000 (approximately US$18,646) per gaming table that is not reserved exclusively to certain kinds of games or players | |
| –MOP1,000 (approximately US$124) per gaming machine including slot machines | |
| Special levies(4) | In accordance with the Gaming Law, which as of the date of this report comprise: |
| –Contribution of 2% of gross gaming revenue(1) to a public foundation in Macao for the promotion, development or study of culture, society, economy, education, science, academic and charity events | |
| –Contribution of 3% of gross gaming revenue(1) to Macao for urban development, tourism promotion and social security | |
| Committed investment | MOP30.239 billion (approximately US$3.8 billion), including MOP27.8 billion (approximately US$3.5 billion) on non-gaming projects. The committed investment is for the development of certain gaming and non-gaming projects in connection with, among others, attraction of international visitors, conventions and exhibitions, entertainment shows, sporting events, culture and art, health and wellness, themed attractions, city of gastronomy, community tourism and maritime tourism(5) |
| Notes | |
| (1)Gross gaming revenue is defined as all revenue of VML derived from casino or gaming areas.(2)The Macao government has set a minimum average annual gross gaming revenue of MOP7.0 million (approximately US870,126) per gaming table and MOP300,000 (approximately US37,291) per gaming machine.(3)No less than the amount of annual premium payable for the operation of 500 gaming tables and 1,000 gaming machines.(4)The special levies may be reduced by order of the Macao Chief Executive in accordance with Administrative Regulation 54/2022 where VML contributes to an increase in visitation to Macao from foreign markets, or due to abnormal, unpredictable or force majeure circumstances.(5)In each year during the term of the Concession Contract, VML shall submit to the Macao government for approval an implementation proposal of these projects, which should set out, among others, the projects to be carried out in the following year, the investment amount and the execution period. The Macao government may require VML to adjust the proposal (but not the committed investment) depending on the needs of socioeconomic development. |
All values are in US Dollars.
In addition, VML will be required to increase its investment in non-gaming projects (the “Increase Percentage”) by up to 20% in the following year if Macao’s annual gross gaming revenue achieves or exceeds MOP180 billion (approximately US$22.4 billion) (the “Trigger”). Pursuant to a notice from the Macao government, the Increase Percentage is subject to deduction as follows if the Trigger occurs on or after the sixth year of the term of the Concession:
| Trigger Year | Increase Percentage |
|---|---|
| Fifth year or prior | 20% |
| Sixth year | 16% |
| Seventh year | 12% |
| Eighth year | 8% |
| Ninth year | 4% |
| Tenth year | 0% |
VML will be required to observe the eligibility requirements under the Gaming Law, including maintaining a share capital and net asset value of not less than MOP5.0 billion (approximately US$621.5 million), observing the capital and management participation requirement in connection with its managing director, and maintaining its financial capacity to operate the conceded business. VML is also required to provide, and has provided, an autonomous first demand bank guarantee in the amount of MOP1.0 billion (approximately US$124.3 million) in favor of the Macao government in relation to its performance of the statutory and contractual obligations under the Concession Contract, which terminate 180 days after the expiry of the term of the Concession.
VML will be required to obtain prior approval from the relevant authorities or officials of Macao for various corporate changes and actions, including expansion of its business scope, issuance of shares, transfer of or creation of any encumbrances over its shares, issuance of debt securities, change of its managing director or the authority delegated thereto, change of its articles of association, transfer of property rights and creditor’s rights exceeding MOP100 million (approximately US$12.4 million), entering into a consumer loan contract or similar contract with a value equal to or exceeding MOP100 million (approximately US$12.4 million), and provision of a loan to any of its directors, shareholders or key employees.
VML will also be required to notify Macao of certain other changes, including any loan, mortgage, claim for obligation, guarantee or the assumption of any debt for financing its business with a value that equals to or exceeds MOP16 million (approximately US$2.0 million). In particular, VML will be required to notify Macao at least five working days in advance prior to making decisions (i) related to the transfer of funds within VML which exceeds 50% of its share capital, (ii) related to employee salaries, remuneration or benefits which exceed 10% of its share capital, and (iii) whose value exceeds 10% of its share capital.
Termination and Redemption
Macao has the right to unilaterally terminate the Concession Contract for non-compliance of VML with fundamental obligations under the Concession Contract and the applicable Macao laws, including in circumstances related to (i) failure on the part of VML to perform its obligations under the Concession Contract, (ii) public interest and (iii) VML ceasing to be eligible for the Concession under the Gaming Law.
Upon such termination, ownership of the casinos and the equipment and utensils used for gaming (even if not located at the casinos) will automatically revert to Macao without compensation and free of any encumbrances, save for certain exceptions.
From the eighth year of the Concession, the Macao government also has the right to redeem the Concession by providing VML with at least one-year prior written notice. In such event, VML is entitled to fair and equitable compensation corresponding to the benefits it ceases to receive from the projects set out in the investment plan attached to the Concession Contract as a result of the redemption. With respect to the compensation relating specifically to the works projects, it will correspond to the income received from those works projects in the fiscal year prior to the redemption, before deducting interest, depreciation and amortization, multiplied by the number of years remaining until the end of the term of the Concession.
Number of Gaming Tables and Gaming Machines
On December 17, 2022, VML was notified that it was authorized to operate 1,680 gaming tables and 3,700 gaming machines under the Concession.
The foregoing summary of the Concession Contract is not complete and is qualified in its entirety by reference to the full and complete text of the Concession Contract, a copy of which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the period ending December 31, 2022 to be filed with the SEC.
| ITEM 7.01. | Regulation FD Disclosure. |
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On December 16, 2022, the Company and Sands China Ltd., the Company’s majority-owned subsidiary (“Sands China”), issued a press release outlining Sands China’s vision for its next 10 years in Macao with the award of the Concession. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.
The information in this Item 7.01 and Exhibit 99.1 hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filing.
| ITEM 9.01. | Financial Statements and Exhibits. | | --- | --- || (d) | Exhibits | | --- | --- | | 99.1 | Press Release, dated December16,2022 | | 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 8-K to be signed on its behalf by the undersigned, hereunto duly authorized.
Dated: December 19, 2022
| LAS VEGAS SANDS CORP. | |
|---|---|
| By: | /S/ D. ZACHARY HUDSON |
| Name: D. Zachary Hudson<br>Title: Executive Vice President, Global General Counsel and Secretary |
Document
EXHIBIT 99.1
| PRESS RELEASE |
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| For Immediate Release |
Sands China Presents its Vision and Investment for the Next Decade in Macao
Company Believes in Long-Term Growth of Macao
Macao, 17 December 2022 — With the signing of a new 10-year gaming concession in Macao complete, Sands China Ltd., a majority-owned subsidiary of Las Vegas Sands Corp. (NYSE: LVS) today outlined its vision for the company’s next ten years in Macao.
“As we look to the future in Macao, we rely on the plan we have successfully executed over the past twenty years. Sheldon Adelson’s vision for what our company would deliver for Macao was big and bold and we are extremely proud of all that has been accomplished,” said Las Vegas Sands and Sands China Chairman and Chief Executive Officer Robert G. Goldstein. “With the support of the government and an extraordinary level of commitment from Sands China, Macao has evolved into a true international destination for leisure and business travel. We believe continued growth in Macao is still in front of us, and as demonstrated since we first began operating there, we will continue supporting and investing in Macao as it solidifies its position as one of the world’s greatest tourism destinations."
During a press conference today, the company outlined both a broad financial commitment to Macao over the next decade, as well as highlighting some key areas of investment. The company has pledged to spend MOP 30 billion (USD $3.75 billion) through 2032 on both capital and operating projects, including MOP 27.8 billion (USD $3.5 billion) in non-gaming projects that will also appeal to international visitors.
“Sands China is confident in Macao’s future and is appreciative of the opportunity to continue working with the Macao SAR government to support the growth of Macao’s economy, society and environment,” said Sands China President Dr. Wilfred Wong Ying Wai. “Our vision, and the strategy we will use to guide us, will help the government reach its important goals of continuing to grow Macao into a world centre of tourism and leisure, promoting its economic and industrial diversification and enhancing its international reputation."
As part of that investment, Dr. Wong said the company would dedicate resources to several key areas, including:
A commitment to expand, improve and optimize the scale and quality of its convention centers and related amenities. This would include the proposed development of a new approximately 18,000 square meter MICE facility adjacent to the existing Cotai Expo, expanding the company’s footprint of inter-connected meeting space and enabling the hosting of additional large-scale international MICE events. In connection with these efforts, Sands will strengthen the planning, organization and international marketing of convention tourism in order to attract global multinational companies to host annual meetings and corporate summits in Macao.
The redevelopment of the existing Le Jardin (the “Tropical Garden” on the south side of The Londoner Macao) to create a new and internationally unique approximately 50,000 square meter garden-themed destination. The proposed garden-themed attraction will include an iconic conservatory together with related themed green spaces and amenities. The conservatory is intended to become a Macao landmark of international renown, providing a year-round themed attraction for tourists and residents.
An expansion of entertainment and sporting events and offerings to grow international tourism, supported in part by a meaningful reinvestment and upgrade of the Cotai Arena. Sands will also develop several new restaurants and introduce innovative international culinary concepts to support Macao’s position as a city of gastronomy. The company will also launch a luxury yacht experience featuring on-board dining and entertainment including celebrity appearances, as well as water sports.
Sands China has also developed a comprehensive overseas marketing strategy and made related investment commitments across key focus areas:
–Focus marketing expenditure in overseas markets, including overseas media and distribution platforms
–Increasing the company’s network of international sales offices in Asia and US/Europe
–Hosting annual large-scale international business exchange event – “Macao Showcase” – at Marina Bay Sands in Singapore to elevate the exposure of Macao as a MICE tourism destination
–Target international customer markets including, South Korea, Japan, India, Southeast Asia and the US.
Growing its commitment to small and medium-size enterprises, continuing to prioritize the hiring, training and horizontal and upward mobility of local Macao residents. To support that effort in particular, Sands China will establish six new Sands China Academies focusing on MICE (Meetings, Incentives, Conferences, Exhibitions), Hospitality, Integrated Resort management, facilities, responsible gaming and entertainment. The company will create an incubation center to nurture local technology innovation and entrepreneurship.
Specific plans to promote Macao’s cultural heritage include the creation of a Macao Heritage Carnival to be hosted throughout traditional areas of the city, facilitating trips for its patrons to Macao’s traditional areas and hosting MICE group events at Macao’s historical landmarks. Launching innovative programs to revitalize Macao’s rich cultural heritage including partnering with local artists to hold regular performances, exhibitions and workshops in rehabilitated buildings.
“We are eager to support Macao’s growth over the next decade. Our company is proud of our contributions during the two previous decades of operations, and we have every confidence the future will bring even more meaningful benefit to Macao and all who share in its success,” concluded Dr. Wong.
About Sands (NYSE: LVS)
Sands is the world’s preeminent developer and operator of world-class Integrated Resorts.
Our iconic properties drive valuable leisure and business tourism and deliver significant economic benefits, sustained job creation, financial opportunities for local businesses and community investment to help make our host regions ideal places to live, work and visit.
Sands’ portfolio of properties includes Marina Bay Sands in Singapore and The Venetian Macao, The Plaza and Four Seasons Hotel Macao, The Londoner Macao, The Parisian Macao and Sands Macao in Macao SAR, China, through majority ownership in Sands China Ltd.
Sands is dedicated to being a leader in corporate responsibility, anchored by our core tenets of serving people, planet and communities. Our ESG leadership has led to inclusion on the Dow Jones Sustainability Indices for World and North America and recognition as one of Fortune’s World’s Most Admired Companies. To learn more, visit www.sands.com.
Forward-Looking Statements
This press release contains forward-looking statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include the discussions of our business strategies and expectations concerning future operations, margins, profitability, liquidity and capital resources. In addition, in certain portions included in this press release, the words “anticipates,” “believes,” “estimates,” “seeks,” “expects,” “plans,” “intends” and similar expressions, as they relate to our company or management, are intended to identify forward-looking statements. Although we believe these forward-looking statements are reasonable, we cannot assure you any forward-looking statements will prove to be correct. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the company’s control, which may cause material differences in actual results, performance or other expectations. These factors include, but are not limited to: the uncertainty of the extent, duration and effects of the COVID-19 pandemic and the response of governments and other third parties, including government-mandated property closures, vaccine mandates, regular testing requirements, other increased operational regulatory requirements or travel restrictions, on our business, results of operations, cash flows, liquidity and development prospects; risks relating to our current subconcession and the new concession, amendments to Macao's gaming laws; general economic conditions; disruptions or
reductions in travel and our operations due to natural or man-made disasters, pandemics, epidemics, or outbreaks of infectious or contagious diseases; our ability to invest in future growth opportunities, execute our previously announced capital expenditure programs in Singapore, and produce future returns; new development, construction and ventures; government regulation; the extent to which the laws and regulations of mainland China become applicable to our operations in Macao and Hong Kong; the possibility that economic, political and legal developments in Macao adversely affect our Macao operations, or that there is a change in the manner in which regulatory oversight is conducted in Macao; our subsidiaries’ ability to make distribution payments to us; substantial leverage and debt service; fluctuations in currency exchange rates and interest rates; our ability to collect gaming receivables; win rates for our gaming operations; risk of fraud and cheating; competition; tax law changes; political instability, civil unrest, terrorist acts or war; legalization of gaming; insurance; the collectability of our outstanding loans receivable; limitations on the transfers of cash to and from our subsidiaries; limitations of the pataca exchange markets; restrictions on the export of the renminbi; legal proceedings, judgments or settlements that may be instituted in connection with the sale of our Las Vegas real property and operations; our ability to continue to have our securities traded in the U.S. securities market; and other factors detailed in the reports filed by Las Vegas Sands Corp. with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Las Vegas Sands Corp. assumes no obligation to update such statements and information.
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