Sands pays US$42.5m to settle out of court with 3 businessmen

Las Vegas Sands Corp has paid US$42.5 million to settle a dispute with a trio of Macau and US businessmen who had claimed they helped the casino developer win its Macau gaming licence in 2002.

The previously undisclosed figure, revealed yesterday as the company reported a record US$178.26 million second-quarter loss, was part of an out-of-court settlement reached in June just before a Nevada jury was set to launch a public hearing on the lawsuit.

The payment to Macau property developer Jose Cheong Vai-chi and gaming industry consultants Clive Jones and Darryl Turok, combined with a US$151.18 million write-down on the aborted sale of a shopping centre in Las Vegas, dragged the casino firm into the red in the three months to June.

Las Vegas Sands' sixth consecutive quarterly loss came despite steady profit in Macau, thanks to aggressive cost cutting, which managed to offset softening volumes at the Venetian, Sands and Four Seasons casino resorts.

'While our operating results reflect the challenging economic environment, we remain pleased that our properties in both Las Vegas and Macau continue to generate solid cash flow,' Las Vegas Sands chairman and majority shareholder Sheldon Adelson said in an earnings release.

Revenue at the three Macau properties fell 3.8 per cent from the previous quarter to US$726.11 million, but earnings before interest, tax, depreciation and amortisation (ebitda) stayed essentially flat at US$173.52 million. The flagship Venetian Macao shed US$10 million in ebitda due to losses on its Cirque du Soleil production and write-downs on receivables from retailers.