Las Vegas Sands has reaffirmed its strategic priorities with a lengthy statement as the coronavirus pandemic continues to have a significant effect on global industries and economies.
After previously making a series of donations the firm states that its greatest priority remains the safety and security of team members and guests, with support for local communities across operational regions of Macau, Singapore and Las Vegas also key.
“The impact of the Covid-19 pandemic on our business has been unprecedented, and I have never seen anything like it in my over seventy years in business,” said Sands Chairman and CEO Sheldon Adelson. “Our greatest priority during this difficult time remains our deep commitment to supporting our team members and assisting each of our local communities of Macao, Singapore and Las Vegas.
“Despite these circumstances, our balance sheet strength will enable us to emerge from this pandemic with all our promising future growth opportunities fully intact. We remain extremely optimistic about an eventual recovery of travel and tourism spending across our markets, as well as our future growth prospects.
“We are fortunate that our financial strength will allow us to continue to execute our previously announced capital expenditure programs in both Macao and Singapore. As the largest shareholder of this company, my interests are very directly aligned with the interest of all shareholders.
“I know that the dividend is important to all our shareholders, as it is to me. I am known for the phrase, ‘yay dividends!’, and I assure you that it is still my mantra. But a strong balance sheet is also a vital and necessary component to realizing stockholder value in the decades ahead.
“As I look forward to the day—soon let us hope—when this terrible virus is no longer of concern—I see many strategic opportunities for our company precisely because of our financial strength.
“It is because of this optimism that we are suspending the dividend so that we have maximum optionality in pursuing our strategic vision and in producing future returns. I commit to my fellow shareholders that we will revisit the suspension of the dividend at the earliest reasonable opportunity,.”
As the Nevada Gaming Control Board detailed a deeper embrace of esports and numerous land-based casino establishment extended closures, Scientific Games has stated a strong liquidity position has already seen the firm cut more than $100m in quarterly costs.
The company anticipates that the operational and capital cost-saving measures it has already implemented, together with additional measures now being implemented, will reduce its quarterly costs in Q2 by over $100m.
The workforce cost reductions implemented, including hour and pay reductions, furloughs, and reductions in force, are expected to result in more than $50m in cost savings in Q2, while capital expenditures in Q2 are expected to be approximately $50m lower than previously planned.
For 2020 as a whole Scientific Games now anticipates that capital expenditures will be in the range of $210m-240m, compared to the previously expressed $300m-330m
Barry Cottle, Scientific Games CEO, said: “We continue to reduce our costs so that that we can position our company to be an even stronger competitor as the industry begins to recover. We remain committed to providing our best in class products and services to our customers across lottery, igaming, sports betting and land-based casinos while innovating for the future. The diversity of our business, serving customers across the industry and around the globe, gives us unique strength in these challenging times.”
The lottery sector must also stick together to protect its market share and fight off the existential threat caused by global lockdown, suggests Spinola Gaming.
As the global lottery sector faces “its biggest ever challenge,” the solutions provider believes the industry is being forced to make the shift online earlier than previously planned.
“Operators could take a leaf out of the online casino business model that treats affiliates in the same way that retailers are to lotteries. The affiliate model is easily implemented, requires no new forms of technology or advanced development and allows both operator and retailer to take advantage of the current situations,” Ade Repcenko, Spinola Gaming CEO, explained.
“At the same time, operators need to appeal to their existing software providers to look at ways in which they can remain active during these troubled times and will require a level of compromise from both sides.
“Operators need to look at new forms of revenue sharing to allow for the affiliate model to work and software providers need to open up to working with new and modern forms of technology to be able to provide the level of service that these state run operators very desperately need right now.”