Posted on: January 25, 2022, 07:02h.
Last updated on: January 25, 2022, 08:37h.
Asian American Entertainment Corp. (AAEC) wants no less than US$7.5 billion in damages from its one-time partner in Macau, Las Vegas Sands Corp (LVS). That’s according to the company’s lawyer, Jorge Menezes, who delivered closing arguments Friday in the long-running breach-of-contract case, as reported by GGRAsia.
Properties like the Venetian Macao, above, helped LVS become the richest operator in the world. AAEC wants a big piece of that pie. (Image: Sands China)
At least AAEC is willing to budge a little from the US$12 billion it claimed it was entitled to in its original complaint. But lawyers for Las Vegas Sands are expected to deny the Las Vegas-based operator has any obligation to AAEC at all when they present their closing arguments Wednedsay in Macau’s Court of First Instance.
The dispute stems from the breakdown of a relationship between the two parties 20 years ago. LVS partnered with AAEC, led by Taiwanese businessman Marshall Hao, when it was looking to enter Macau in the early 2000s.
In 2001, the two companies submitted a joint bid for a casino license shortly after Macau chose to liberalize its previously monopolistic gaming market.
But LVS dumped AAEC and later submitted a revised bid with Galaxy Entertainment Group, which had already been granted a license. In 2002, Macau’s government allowed LVS to become a sub-licensee of Galaxy.
Soon, LVS was the biggest player in what was fast becoming the world’s biggest gambling hub. Its Macau operations – first the Sands Macao, then the Venetian Macao – enabled it to become the richest casino operator in the world. Since then, it has added two more ambitious resorts to the mix, the Parisian Macao and the Londoner Macao.
AAEC claims that without its early guidance, LVS would have struggled to negotiate the complex licensing process and cultural nuances in Macau.
Billions Left Behind
Hao says he would have invested as much or more than LVS into the joint venture had it been allowed to proceed. The initial claim of $12 billion was based on “lost earnings,” representing 70 percent of LVS profits in Macau from 2004 to 2022, the date the license will expire.
On Friday, Menezes said the US$7.5 billion baseline figure was “based on reasons of fairness and discretion.”
LVS has disputed any liability and said the figures AAEC claims are based on a misreading of financial statements submitted to Macau’s gaming regulator. The company said it has plowed $15 billion of its earnings back into the construction and development of new resorts in the gambling hub.
Meanwhile, former Macau regulators who oversaw the licensing process have testified that LVS was seen as a highly desirable applicant. They said its experience as a Las Vegas operator most likely outweighed any contribution that might have been made from its local licensing partners.