Siding with LVS
The Court of First Instance in Macau has ruled in favor of Las Vegas Sands (LVS) in a case that has been rumbling on for years. The unanimous decision went against LVS’s first partner in Macau, Asian American Entertainment Corporation (AAEC). While announcing the decision, the court reportedly admonished AAEC for acting in bad faith.
were planning to make a joint bid in 2002 for a casino license
AAEC was at one point pursuing compensation of about MOP$96.5bn (US$12bn) from LVS, alleging that the Las Vegas-based casino company broke its contract with AAEC. The two parties were planning to make a joint bid in 2002 for a casino license in Macau, but LVS ultimately partnered with Galaxy Entertainment Group. AAEC claimed that it did not get its due reward for allegedly helping LVS get a license.
The agreement between LVS and Galaxy also soon went pear-shaped. While the joint bid was successful, a high-profile split ended up seeing Galaxy get the license, while LVS had to settle for a sub-license.
A long-running matter
The origins of the legal action by AAEC against LVS date back to 2007. The case was dismissed in Nevada in 2010 as the plaintiff failed to retain counsel and prosecute the case. It was in January 2012 that AAEC ended up filing a lawsuit in the Tribunal Judicial de Base seeking compensation of about MOP$3bn (US$371m).
The named defendants were the Venetian Casino, Las Vegas Sands LLC, Las Vegas Sands Nevada, and Venetian Macau Ltd. There were many delays to the case over the years. In January 2019, the plaintiff requested to increase its damages claim to MOP$96.5bn (US$12bn).
AAEC claimed that the updated damages sum accounted for the loss of profits between 2004 and 2018. It also stated that it reserved the right to claim lost profits running up to the 2022 expiration date of LVS’s concession. Subsequently, AAEC lowered its damages to claim to the equivalent of at least US$7.5bn.
An uncertain future
AAEC owner Marshall Hao has stated that if he had known that LVS would not honor their deal that he would have instead pursued more Macau gaming action himself. LVS has claimed over the years that it was Hao who exited the agreement. It also said that Hao did not have as much experience in Macau as Galaxy Entertainment and its decision to split from AAEC didn’t violate any terms of the contract.
unclear what AAEC’s next move might be
It is unclear what AAEC’s next move might be. LVS is busy with its operations in Macau and Singapore, as well as pursuing potential opportunities in Texas, New York, and Florida. It no longer has a casino resort presence in Las Vegas after selling its properties, including The Venetian, in February.