Local media reported that a Macau second trial court ruled that Las Vegas Sands Co (NYSE: LVS) should go to trial to prove a breach of contract related to the 2002 Macau Games concession store. After years of appeals and counter-appeals in the U.S. and Macau, the case was moved to the first trial court for trial, where the appeal and counter-appeals will be held until the trial ends of the trial.
The Asian American Entertainment Corporation (AAEC) claims it approved a partnership with Hong Kong’s Galaxy Entertainment Group (GEG) after inviting LVS, which was then cash-strapped, to bid for a Macau game license.
LVS and GEG are now the world’s first and third largest gaming companies, primarily as a result of the partnership, with the separate company’s total annual revenue of nearly $20 billion.LVS reports total revenue of just over $500 million. LVS’ total income, excluding costs of goods, depreciation and amortization, was $4.42 billion.
The question is whether AAEC’s 70% stake in the joint venture with LVS (JV) expired or renewed when Sands merged with Galaxy to get a sub-concession to start games in Macau. JV had an expiration date immediately after the tender ended, but was given a concession after the target date.
Taiwanese businessman Marshall Hao is seeking compensation for breach of contract and wants LVS to receive compensation for its 70% stake held by the joint venture before jumping in the middle of the concession bidding process.
On the surface, it may seem like another billionaire company that is trying to avoid just over a decade of trial and defend its stake in the world’s most profitable business market, according to a source familiar with the matter who met with a Time magazine reporter.
The report suggests that secrets related to Las Vegas Sands, other game operators, local governments, and even Beijing could be revealed in court trials where plaintiffs’ lawyers investigate facts related to concession disclosure negotiations.
Former Macau Chief Executive Edmund Ho was reportedly asked by the prosecution to appear as a witness, but was asked to testify in writing without appearing in person, and the current Chief Executive Chusaion banned Ho from reporting his trial.
The trial is not expected to begin until next year at the earliest, and the matter is likely to face another appeal and counter-appeal in the Macau court system before it can be resolved or decided.
Sands China’s Galaxy 20-year sub-concession expires, but could be extended for another two years.