Las Vegas Sands, owners of the Venetian and Palazzo, announced today that they were in default of certain convenents on their long term debt. This means that the lenders can call for the debt to be paid back immediately, triggering an almost certain bankruptcy. Sheldon Adelson, who owns 70% of the company, has already lent them a half a billion of his own money and may have to pony up more if he can find additional financing.

Its an amazing fall for a company that just a year ago was on top of the world. Adelson was one of the richest men alive and they had new projects going in Vegas, Macau, Singapore and Philly. All of that construction activity turned out to be the downfall as they took on way more debt than they can handle in the current horrendous environment. While the economic situation on the strip is certainly not Adleson's fault; when the downturn started, instead of trying to lure in the serious gambler he did everything in his power to drive them away by destroying anything even remotely playable in his casinos. Meanwhile, just next door at Wynn, he put in some decent plays and is weathering the storm much better than the guys at LV Sands. Of course, that is a gross over simplification but the point is that Wynn knows how to bring a customer in while Adelson was just good at fleecing them. I personally know of several high-end player who bailed on Venetian long ago. In times like this, a casino needs its regulars who won't think twice about putting in 8 hours a day in front of a machine. When things were good, the Venetian said "the hell with the gambler" and instead banked on the conventioner to pay the bills with $300 dinners. Well those people have stopped coming and his regulars are now playing at Wynn, the Palms and Green Valley Ranch.As the old saying goes... You reap what you sow!

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