Apollo Open to Buying More Casino Assets as Venetian Thrives

Posted on: November 3, 2022, 02:14h. 

Last updated on: November 10, 2022, 02:34h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

The Venetian Las Vegas is thriving under the stewardship of Apollo Global Management (NYSE: APO). Things are going so well at that integrated resort that the private equity behemoth said it’s open to acquiring additional casinos — in Las Vegas or in other regional markets.

Venetian Resort Las Vegas
The gondola rides at Venetian Resort Las Vegas. Operator Apollo Global told Nevada regulators it’s open to more casino acquisitions. (Image: Bloomberg)

Executives from Apollo made those remarks in an appearance before the Nevada Gaming Control Board (NGCB) earlier this week. The private equity company requested NGCB approval to distribute a $620 million dividend — further evidence of success at the Venetian — to its investors.

NGCB asked Apollo representatives about the financial state of the Venetian and whether the operator is taking steps to prepare for the possibility of a recession adequately. Data confirm the integrated resort is, in fact, well-capitalized.

We’re run-rating north of $600 million of (adjusted earnings) for the business relative to 2019,” Venetian CFO Robert Brimmer told the NGCB. “We’re up 27%. This is a very broad-based recovery across our business. You’re aware of the strength in the gaming numbers, but the hotel, food and beverage, and most importantly, our meeting and convention business is recovering very nicely.”

In March 2021, Las Vegas Sands (NYSE: LVS) announced the sale of the Venetian, Palazzo, and Venetian Expo. to Apollo and VICI Properties (NYSE: VICI) for $6.25 billion. Apollo paid $2.25 billion for the operating rights to the venues, while VICI shelled out $4 billion for the real estate. The transaction closed earlier this year.

Apollo Interested in More Casinos

Brimmer told NGCB board members that Apollo is open-minded regarding potential acquisitions that could add to Venetian or otherwise.

“We’re always looking for M&A (mergers and acquisitions) to create network effects around the Venetian asset. We think it could be a marquee asset you can build around with other regional or Vegas assets, so that’s something we’re analyzing as well,” he said.

Those comments aren’t surprising, given the private equity shop’s long-running history in the gaming industry. Apollo previously controlled Caesars Entertainment and today runs the Great Canadian Gaming Corp., Italy’s Gamenet Group S.p.A, and is frequently tied to a slew of gaming industry mergers and acquisitions rumors.

Specific targets weren’t mentioned, but Apollo has the resources to affect a significant transaction – be it an outright takeover of a gaming company or purchasing another marquee venue.

Bright Outlook for Venetian

Brimmer told the Nevada regulators Venetian has $300 million in cash it doesn’t need on its balance sheet and that the Las Vegas rebound is sturdy.

“To us, it appears to be a very durable recovery, and our most recent numbers for October were the best numbers we’ve had in the last 10 years,” he added.

Last month, it was revealed Apollo is planning to allocate $1 billion or more to enhancing the Venetian. That’s a tidy sum, particularly when Las Vegas Sands spent $1.5 billion to build the venue, which opened in May 1999.