Adelson: Casino competitors drag down business with low room rates
Sheldon Adelson has never been shy about blasting his Las Vegas competitors during earnings calls.
He brought his well-known persona as a verbal brawler to a routine call Wednesday, when he jabbed at MGM Resorts International and Caesars Entertainment Corp. for low room rates.
Toward the end of the call, Harry Curtis, an analyst from Nomura Securities, asked Adelson if he expected more positive results from his Las Vegas properties in the future.
“I don’t know,” Adelson said, according to a transcript from SeekingAlpha.com.
Adelson then lassoed MGM and Caesars into the conversation, pointing out their control of 20 hotel-casinos along the Strip and low room rates.
Adelson said he and Steve Wynn can’t offer rates as low but contended his competitors' properties do not offer the quality he offers at his resorts.
The casino king then highlighted the rival companies’ massive debt loads: Caesars carries $21.5 billion in debt, while MGM carries $13 billion in debt. Las Vegas Sands is about $9.5 billion in debt.
Caesars’ “income barely pays its debt service,” Adelson said.
After claiming the companies’ reduced room rates hurt business in Las Vegas, Adelson offered sympathy.
“I don’t necessarily blame them,” Adelson said. “I suppose if I were in that position, I might do the same thing. They need bodies in their casinos and they need bodies in their beds, and the only way to get them is to buy the business by reducing the price.”