This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk05: Good afternoon. My name is Katrina and I will be your conference operator today. At this time, I would like to welcome everyone to the Las Vegas fans first quarter 2021 earnings conference call. All lines have been placed on mute to prevent any background noise. I will now turn the call over to Mr. Daniel Briggs.
spk03: Thank you, Katrina. Joining me on the call today are Rob Goldstein, our Chairman and Chief Executive Officer, and Patrick Dumont, our President and Chief Operating Officer. Also joining us on the call are Dr. Wilfred Wong, President of San China, and Brant Chung, Chief Operating Officer of San China. Before I turn the call over to Rob, Please let me remind you that today's conference call will contain four looking statements that we are making under the safe harbor provision of federal securities laws. The company's actual results could differ materially from the anticipated results in those four looking statements. In addition, we may discuss non-GAAP measures. A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures is included in the press release. Please note that we have posted supplementary earnings slides on our investor relations website. We will refer to those slides during the Q&A portion of the call. Finally, for those who would like to participate in the Q&A session, we ask that you please respect our request to limit yourself to one question and one follow-up question. so we might allow everyone with interest the opportunity to participate. Please note that this presentation is being recorded. With that, let me please turn the call over to Rob.
spk08: Thanks, Dan. Good afternoon and a very early good morning to our colleagues in Asia. Some brief comments, then we'll write the Q&A. Our results reflect the pandemic's impact. We did generate $244 million of EBITDA per quarter. And we do have a strong belief in the Macau recovery, because the March numbers were very different from those in January and February, and the recent visitation numbers and veteran numbers for April affect continued acceleration. Obviously, we cannot define the timing of the full recovery, but it's underway, and we believe it will continue in 2021. At this time, Singapore is in the $500 million to $600 million range annually EBITDA. There is no visibility as to when air traffic will return to Singapore, and unlike Macau, it's more difficult to project additional or incremental EBITDA from MBS until the resumption of material air travel. Our investments in Macau continue to take shape as the market recovers. Four seasons in London will present, I think, large growth opportunities for us. And we continue to have the largest footprint in this incredible market of Macau. And China continues to demonstrate economic resilience to spending. Macau is very strong at the pre and mass level from both a gaming and a retail perspective, being referenced on page 29 and 30 of the investment retail perspective. There's some pleasant surprises there. But again, we have no reservations about our ability to perform to pre-pandemic levels once visitation returns. Our company today is sort of divided into three different areas, the Asia portfolio, Macau, and Singapore. And while we believe Macau will accelerate this year and lead the recovery, Singapore will follow up on the resumption of air travel and participate in the recovery as well. And we anticipate a return to a $5 billion-plus EBITDA from Asia in the future. Our sale of Las Vegas assets enable us to have huge optionality to explore large-scale land-based destinations in both the United States and Asia. And finally, we're eager to have a material digital presence in the future. We are exploring multiple opportunities at the present time. This is obviously a departure from our historical approach, and we will update you at the appropriate time. So let's go to Q&A and our first call, please.
spk05: At this time, if you would like to ask a question, please press the star and then the number one on your touchstone phone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. We'll pause for just a moment to compile the Q&A roster. First question, we have Robin Farley, I'm sorry, we have Carlos Santorelli from Deutsche Bank. Your line is open.
spk03: Hey, guys, thanks for taking my question. Rob, appreciate, you know, there's probably some sensitivity around it, but in your prepared remarks, obviously, you talked about some of the Asia opportunities, and clearly upon the completion of the Las Vegas sale, which obviously came at a very nice multiple for you guys, and I'm sure you'll have very nice proceeds coming out of it. How do you think about the use of those proceeds in light of some of the opportunities you're obviously kind of eyeing in Asia right So relative to, you know, obviously the return of a dividend, you know, potential for buybacks longer term, potentially owning mortgages against China, all of the above, how do you kind of prioritize that pecking order and acknowledging you can do several of those things kind of with the balance sheet and the position that it's in?
spk08: Sure. We look at, obviously, the greatest opportunity for return. I think we continually believe there'll be something happening in Macau at some point in the future which will enable us to reinvest in Macau on a non-gaining basis. We're hopeful that'll happen sooner than later. You know that our project in Singapore, our Phase 2 project, we're still continuing to work through those issues there. We continue to look at other large-scale Asian opportunities. And then, of course, we think in the U.S. there may be some opportunities for us here. And lastly, digital. I think we look at everything individually and look at the returns, but our priorities remain getting back on our feet and Asia getting back to a $5-plus billion EBITDA and maintaining that. That's the backbone of our company. That's where we'll start first. If something opportunistically opens up in the U.S., obviously look at that. And if something opens up digitally, we're deep into a digital deep dive to figure out how to deploy capital intelligently to get a return. And I think there'll be some nice opportunities in the future there. As far as a dividend, I'd like Patrick to address that issue of the return of the dividend. Patrick?
spk09: Sure. Thanks, Rob. So I think, you know, as Rob mentioned, we look very cautiously at the way we deploy capital, and we're very patient, and we look for the way to maximize our returns for shareholders. And so when we look at the dividend, it really was, and hopefully will be in the future, really the cornerstone, and you've heard me say that before, of a return of capital program. And I think where we are today is that we're going to look for operations to return to a baseline level and get a sense of where those operations are trending, and then make an assessment with the board and with management, looking at our long-term potential to where the dividend should be, given our ability to reinvest and allocate capital to other projects that are higher growth. And so I think it's pretty consistent with what you've heard us say before on calls, and nothing's changed from that perspective.
spk03: Great, guys. Thank you. Thank you, Patrick, for that. And then if I could, whoever kind of wants to take this, it's more of an opinion question than anything else. But obviously, there is some consternation in the investment community around the status of VIP in Macau and the direction of VIP going forward in Macau and whether or not there's a perception that that will have a positive or negative impact on the premium mass segment in One could obviously make the case that VIP customers who are having a harder time accessing capital who do like to gamble could obviously move into the mass segment or premium mass segment, which wouldn't be the worst thing to happen. Or the fact that maybe some of that's still overplayed from VIP if VIP software doesn't show up in mass. Rob, maybe what's kind of your view and a view from your folks in Macau on how they would expect that to play out?
spk08: I have a very strong view, but since I woke up at 4.30 in the morning when Grant took that call. Grant, are you there?
spk00: Yeah, thanks, Rob. Yep, we're here. Sure. On the question of VIP and premium mass, I think you've clearly seen the segments have diverged in terms of the recovery. Clearly, premium mass has made a very significant recovery and already approaching 50% of pre-pandemic levels. VIP, on the other hand, is still struggling at around 20% or sub-20%. So the segments are actually following very different trajectories, and we would expect that to continue for the time being. And, of course, your question about whether there's spillover or whether there's migration, I don't think those dynamics have really changed since a few years ago, that there is a structural change over time where more of the customers and more of the new customers are dealing directly with assets on the integrated resort that all of the operators, including us, we've built up. have attracted more and more of these consumers to the premium mass program, and we expect that to continue over time as these non-gaming lifestyle assets and products continue to attract people.
spk03: Great. Thanks, everybody. I appreciate it. Sure, Carl. Thank you.
spk04: Next question. We have Joe Goss. From JP Morgan, your line is open.
spk02: Hey, everybody. When you look at your, you know, advanced bookings for the Golden Week holiday in Macau, do these bookings suggest or imply a further acceleration in visitation or mixed quality? It might be tough on sort of standard GGR level, you know, relative to April and March. And anything underlying that suggests that maybe people are anticipating a you know, any, or Macau patrons are anticipating, you know, any further incremental easing of travel restrictions.
spk08: John, I don't think I want to share with you our bookings for Golden Week. I just think we look at the, I think the best reflection of the market right now is the acceleration of April. I think across the board, the visitation revenue is growing, and We may convince the cows in a recovery mode already. I think the term came in March. Very encouraging. I think it's foolish for us to try to call the thinking might be an advantage to find it.
spk01: Instead, it's a slow process of gradual growth, and I think the market will be disappointed.
spk08: inflection point was just like golden week pops the numbers to a materially different level i think we're seeing the gradual growth uh the easing restrictions obviously the government decision people are getting there as evidenced by the the numbers coming out of april and the revenues and i think we believe that you know this will just continue to accelerate uh with the only caveat being hopefully we don't see returned any any uh cases of virus uh we offer a grant any thoughts on that
spk00: Yeah, I think we're bound in visitations versus January and February. And as you've seen from the figures released by MGTO, that has continued on a similar momentum in April, with visitations reaching post-pandemic highs in the middle of April. So the acceleration is seen across very encouraging across all the different segments, whether you're talking about premium mass, mass. But the encouraging thing is that since March, we've really seen an acceleration in the base mass, as well as the leisure FIT guests at the hotel. Of course, retail, especially at the high-end consumption end of things. And we've even had an initial of the mice segment activity in March, and bookings for Q2 look encouraging for the mice as well, which is a surprise. But I think what you can see is a broad-based recovery in the different segments since early March.
spk01: Very emotional. If there's not as much recovery in May, we'll need to... Here in Las Vegas, it looks like the weekend is pre-pandemic levels. It's amazingly busy here, and demand is back.
spk08: I think Macau's going to follow suit. Of course, Vegas is still waiting for the return of the group business, but that's inevitable, and Asia. But I think China and Macau are just going to continue to move forward, accelerate.
spk01: I think we'll see a slow, gradual return in the second half of the year.
spk08: It could be very positive for everybody over there.
spk02: Great. And then my follow-up question is maybe for all of you, those in Las Vegas and those on the ground early in the morning in Macau. And I just wanted to ask a question about a topic you guys love to answer. It's sort of your thoughts on the timing or process for the concession renewal process. And I think I'm going to ask in a way that's answerable. If the government was knocking on that, and even if that was an extension for relatively short periods of time, would they have discussions for that?
spk01: Maybe I'll let you... I don't even want to speculate because we don't know.
spk08: We've not heard from the government. We don't know what they're thinking, but... As you said, you know, ad nauseum in the past, we remain strong believers in our position there. You know the story of LBS and what we've done in Kodai and the $15 billion investment and the non-gaming assets we built. We just aren't that concerned about when the government tells us, they tell us, but we don't have any insight and nor do we have any idea when they're going to do that. But we feel renewables will happen. We feel it's right. Other than that, I don't have any other insight. Unless Wilford, maybe you want to add to that?
spk07: Is that fair to say? Yes.
spk01: You know, all the six concessionaires, as we draw closer to the expression,
spk07: of the concession. But as ever, we stand ready to cooperate with the government once they announce the and what they intend to do over the next 12, 18 months.
spk01: Thank you, guys. Sure, Jeff. Thank you.
spk04: Next question, we have Steven Grambling from Goldman Sachs.
spk05: Your line is open.
spk10: Hey, good afternoon. Thanks for taking the question.
spk01: Hi, Steven.
spk10: As a follow-up, I think, to Carla's question on the proceeds from Las Vegas, I guess where would raising your ownership of Sands China factor into that list? And can you just remind us what the process or limitations might be if you did want to go down that path?
spk08: Sure.
spk09: Yeah, sure. How are you, Stephen? So I think about the long-term future and success of Macau as a world-leading leisure and tourism destination. And as Rob has said before, and as you've heard on these calls, we're very interested in investing more. It's definitely something that we think about and consider over time. I think where we are now is, you know, we don't have the proceeds yet. We're looking at all the options, and we're going to consider everything. I think we're going to be very focused on returns and develop more in the markets that we're in. And I think that'll be something that we think about. And I think really for us, there's a lot of opportunity in front of the company. And we're being patient. We're looking at it all. And we're going to look through the lens of maximizing return. So it's not something that I'm going to say we're going to do now, but it's something that is in the things that we consider as we look across the way we might allocate capital.
spk10: And so just to clarify, is there a maximum ownership percentage that you can go up to for SANS China?
spk09: So I think technically they want to have 25% of the float outstanding for the exchange, but there are exceptions. Got it. Grant, I want to make sure that that makes sense. I just want to ask Grant, I want to make sure I didn't mention anything there.
spk10: That's helpful.
spk01: Is there any impact that we should be thinking about Think about corporate expenses going forward.
spk10: Is basically what you reported this quarter kind of the right run rate to think about, or is there other things that might be in there?
spk09: No, I think what you should see over time is that corporate expenses should adjust post-sale. But I think in the long run, we will continue to have a corporate office that manages the activities of the enterprise as a whole. So there's nothing in there that's noise right now, but you should expect to see some changes going forward after the completion of the sale.
spk10: Makes sense. Thanks so much. I'll jump back in the queue. Thanks, Stephen. Thanks, Stephen.
spk08: Appreciate it.
spk05: Next question. We have Thomas Allen from Morgan Stanley. Your line is open.
spk11: All right. you know the the performance of the property improved um quarter recorder you know obviously they're not getting any more chinese visitors there so can you talk about some of the drivers of that yeah surprisingly you know a slot business business except the biggest drivers of spot performance has been outside it's been i mean last year locking up against uh pre-pandemic levels
spk08: I think that reflects the comfort level with the team other than the ability to provide slot capacity without having to feel uncomfortable. It's more difficult on the table side to do that. There's more spacing on the table side, which makes it more difficult. But as you referenced, not having that, you know, foreign participation is very hurtful because there's visitors in front of It was a strong slot market before we got there. It just has gotten better over the years with our ability to provide a good quality product. But that's the driver, no question about it. But without that foreign visitation, it's hard to grow the premium masks and the high-end cable business. So we continue to struggle, and I think we'll stay in this range until things improve. And unlike Macau, I think we're going to see a move this summer and fall. I don't think you can see that any reason to believe that happens in Singapore. The neighboring countries are still struggling with the vaccinations, be it Malaysia or Indonesia, Japan, there's no real evidence that this is going to change in the short term. But it's a slot business over there that's been really exceptionally strong.
spk09: The other thing to note, and this is Patrick, is just keep in mind that while the pandemic-related restrictions have eased, the actual activity levels of the people in Singapore over time across the quarter. So as people get vaccinated, as public health initiatives bear fruit, people who are in Singapore are more out and about. And so we've benefited from some of that as well. So it's not as if there's a change, to Rob's point before, it's not as if there's a change in visitation, but there has been a change in activity in Singapore as things return more to normal there. Makes total sense.
spk11: And then just as my follow-up, it seems like you're getting more and more serious about your digital strategy. Can you just elaborate a little bit more on that?
spk01: I really can't because we're not there yet.
spk08: Thomas, we have, you know, we're like the new guys on the block, but I think the game is just beginning, and we're looking at it from many, many aspects. We're spending a lot of man hours, a lot of people looking at the opportunities.
spk01: We have a big appetite, but as you You know that market is still developing.
spk08: I think we're looking not just at the sports or the gaming, but all aspects of digital. We find it fascinating and very, very complementary to our land-based business, but we're just not ready yet to disclose what we're going to do because we haven't decided. There's not much color there, but I think you'll be hearing from us this year and next year about the direction we're taking.
spk09: Perfect. Thank you.
spk08: Thanks.
spk09: Thanks, Thomas.
spk05: Next question. We have Sean Kelly of Bank of America. Your line is open.
spk14: Hi, good afternoon, everyone. I just wanted to go back to the kind of question around some of the possible reinvestment back in Asia as you've got so much cash or liquidity available on the balance sheet and obviously heading into the concession process. So my specific question was that there was some press recently about you know, possible investment in the broader Greater Bay Area being a potential criteria or potential, you know, result of the concession process. And I just kind of, you know, piqued my thinking around, you know, would that be something that LDS would consider potentially investing in non-gaming, let's call it, in the broader region but outside of Macau directly? Is that something you – how would you react to that?
spk08: Positively. We are, again – we're staunch believers in the rebound of Macau. It's coming back, and for the people who somehow don't believe it, that's, you know, we'll have to wait and see, but it's going to come back in a strong way. We'll be the leading player in that space. Our Londoner and Four Seasons investments are going to be, I think, very well received. If the government wants us to invest, you know, in the region, we'll do it. We have capital, we have appetite, and we remain committed to Macau in a big way. We believe it's going to grow and grow for us, and... And despite all the distractions and all the pandemic, all the issues, Macau still remains, from a land-based perspective, the most opportunistic and advantageous market in the world. And we plan to be there for a long time and invest more capital. And again, the government's directions will be paramount to our thinking.
spk14: Great. And just maybe as a quick follow-up, potential reopening of Hong Kong, just kind of curious on the latest there. I think the case counts have been, you know, I think very low, and there's some positive news there. But I think the vaccination rate is also very low. So just curious on, you know, color from that part of the market and that as a possible, you know, avenue for reopening some of the travel in the region.
spk08: Sure. Walker to Grant, can you grab that since you guys are right there, right in the middle of it?
spk07: Yeah, I think it is gratifying to note that The cases every day is dropped to single digit. And I think yesterday there was no home case in Hong Kong. The both governments of Hong Kong and Macau have announced that if there is a continuing period of 14 days of zero cases, they would open or consider opening the border between Hong Kong and Macau. And I think the Hong Kong government is working very hard to achieve that. And hopefully, if that happens, that's going to help our business a lot.
spk14: Thank you very much. Thanks, Sean.
spk05: Next question, we have Chad Damon from Macquarie. Your line is open.
spk11: Hi, good afternoon. Thanks for taking my question. I know it's early on the Londoner opening of Phase 1 here, but just wanted to ask about the makeup of the customer or how you guys are running that right now between Londoner and Venetian. Is there a major difference in terms of the customers that are visiting one versus the other from a base or premium standpoint? And are you deciding to comp certain players into one versus the other, just trying to get some additional color in terms of how that's running since it just reopened? Thanks.
spk08: Mr. Chum? Yep.
spk00: Yes, on the subject of London, well, I think if you take a step back, we opened our first new product in the four seasons at Grand Suites last year, and that has progressed exceptionally well in terms of customer feedback. And so clearly that is more targeted at the premium mass and the long-stay leisure family guests. And then when we got to early part of 2021, as you referenced, we opened the first space of Londoner. That's really the main Londoner hotel and the north side of the building with the Crystal Palace atrium and some of the signature food and beverage outlets. and some other attractions that we've opened up so far. And I think it's important to remember that a large part of the building, namely on the south side, the Sheraton side, is still under heavy construction, actually both on the interior as well as the exterior facade, because we have been bringing forward the construction works on that side of the building to take advantage of the low levels of traffic. So in terms of your question about segmentation, it really follows the trajectory of the initial recovery that we see in Macau right now. Therefore, not very much in terms of base mass traffic, and that's both because of the demand side, but also the fact that the south side of the building is undergoing large-scale construction. And it's really focused more on the premium mass segment, as well as the FIT leisure guests. We've enjoyed a resumption of the FIT segment in the various hotels that we have in the London and Macau. But Clearly, there's a lot more to come in the remainder of the year into early part of next year in terms of the products that are coming online. We've got a second Wall Street Hotel London Accord opening up later on in the year. The Sheraton side, we're going to have the second Wow Space atrium, Shakespeare's Hall, coming online imminently in the second quarter. Obviously, we still have the London Arena and another... call it six, seven, eight food and beverage outlets together with the themed attractions in the property, as well as the re-theming of the retail shops. So hopefully that gives you a sense of where we are today.
spk11: Okay. Yeah, that's great. And then separately, just regarding your retail mall business in Asia, which is on slide 29, you've outlined that rental concessions have come down sequentially, which should be a positive just in terms of the health of your tenants. Is there anything that's going to change dramatically going forward just in terms of a turnover versus base turnover? you know, component of the makeup of this business or when visitation kind of gets back to more normalized levels, do you still expect for the profits of the retail mall portfolio to kind of mirror what you saw pre-pandemic? Thank you.
spk08: Absolutely expected to be very much like the pre-pandemic levels. I mean, what you're seeing now is similar to the U.S., outside spending by affluent people driving these crazy good numbers out of the luxury of four seasons and other. But I think we expect a full recovery. We have no concerns or trepidation that. As visitation to Cal returns and to Singapore, our malls are going back to pre-pandemic levels and perhaps even beyond that. So we, you know, I don't think we have any concerns that you're seeing a correction on the rent concessions. You're seeing it go the right direction. We're very pleased with the caveat that we want to see a return to mass traffic, as well as very affluent people driving these large performances. But, yes, we expect it to look a lot like pre-pandemic levels, hopefully, as the year continues. In Macau, Singapore is a little more difficult because, again, until the resumption of air traffic and foreign travel, I think Singapore is going to lag their pre-pandemic levels and Again, we feel much more aggressive in the return of Macau than we do at Singapore at this time because we don't see the vaccinations kicking in as large in the region, nor do we see air traffic, any visibility into resumption of air traffic. So it's hard to see Singapore getting back to pre-pandemic level this year.
spk11: Thanks, Rob.
spk08: Sure.
spk05: Next question, we have Robin Farley from UBS. Your line is open.
spk06: hi thanks a lot of my questions have been asked already but um i'm curious on the online strategy uh it sounds like it's going to be a little while from from your comment earlier um before there would be some announcement about lvs involvement um is it fair to say given that you know there's um so much activity around getting market share when new markets open that if you're kind of maybe coming to the online markets a little bit later than others that maybe your strategy would be kind of M&A focused rather than kind of building, you know, building from scratch your presence in those markets?
spk08: Robin, the thought is we can go either direction. We can go M&A or we can build organically. But at this point, again, I don't think we're late in law. I think the challenging businesses, despite the valuation, they still are challenging businesses and its early innings maybe affects national anthem time in terms of some of these businesses. I mean, online U.S. is still very – online gaming, which has been the most positive, is still in a few states. And I think the sports fed remains a conundrum to some extent as to what's really happening there. And there's also a lot of room outside the U.S. There's Europe and there's North America. There's all kinds of opportunities. I don't think it will be that long. We'll come back to you. But we're trying to, again, assess how to be smart and targeted. Obviously, with the kind of balance that we have, the optionality is endless, and we want to be careful and do it the right way. We really have the finest land-based business. I want to get that back and healthy, but we'll come back at the right time and the right strategy and the right thought process. I wouldn't want to obligate ourselves to say it's going to be organic or it's M&A, but we'll get there. I promise you that. We have a pretty voracious appetite to be in that world, and it may be different than you think it's going to be, but we'll let you know when we're ready to talk about it.
spk06: Okay. All right, great. Thank you.
spk05: Next question, we have Steve Wisinski from Stiefel. Your line is open.
spk12: Hey, good afternoon, guys. Good afternoon. So the guys on the ground earlier in the call talked about the favorable case counts they're seeing in Hong Kong. But I guess the question is, can you guys provide any color around the actual vaccination progress in your key feeder markets like Macau, Hong Kong, Guangdong? Obviously, it's very tough for us over here to get a good understanding where they are today versus maybe somebody like the U.S. is right now. So any color there would be pretty helpful.
spk08: Walker, Grant, can you help me on that one?
spk07: Yes, I think the situation on the ground in China, they have started the vaccination program, but there's really no hurry for people to get the vaccination because China's been very safe for the last months. And for Hong Kong and Macau, Macau has no incidents for over 380 days. So the feeling of comfort is causing a lot of people to adopt a wait-and-see attitude. But it's getting there. People are slowly taking up the vaccination. Same with Hong Kong. I think Hong Kong is... Unfortunately, a few cases of people suffering after the vaccination. So again, there are people adopting a wait-and-see attitude. But slowly, slowly, people are beginning to realize the importance, especially if they are thinking of traveling overseas, that the The travel bubble may require vaccination certification. So I think people are beginning to take up vaccination.
spk12: Gotcha. Thanks for that. And, Rob, there's been some talk or some rumors out there about Macau potentially moving to a digital currency down the road at some point, try to combat money laundering. Do you have any high-level thoughts around something like that being implemented? And then, if something like that would get implemented, maybe the impact you potentially could see across certain business segments?
spk08: I think a couple thoughts on that. One is, some people are concerned. We're not. We think it's an additional form of liquidity into the market. Two, it won't preempt other currencies or other ways of having funds to gamble. But also, I think some of the problems we have in our industry, we think that everything is done in Beijing. They're actually thinking about casinos in Macau. I'm not sure that's the case. There's a different thought process there. I think sometimes we have a very limited in our thinking. I don't think Macau is a target or an anti-money laundering as much as a digital currency strategy by Beijing. And I don't think it's hurt Macau whatsoever. I think it's just added additional liquidity. And Grant, do you want to weigh in on this at all?
spk00: No, I think you said it well. I think it's a big and complex topic. It's really more about the digital currency strategy of China more broadly than and also how Macau can fit into that. So probably most helpful is to refer to the comments by the chief executive recently in the question-and-answer session in the legislature. Basically, this digital currency issue China has been looking at since 2014. And so Macau will also adjust and adapt in order to accommodate this broader strategy on digital currency. But a prerequisite of that is also getting prepared in terms of amending the existing relevant legislation. So this is still an early stage process from the perspective of Macau.
spk08: the assumption has been by a lot of people just a negative thing we do as a positive as again we would love to have more more cross currency and more cross-border currency so to me along with the pataka hong kong dollar you know it's another form of currency and for those who are concerned if our business is not built on money laundering nor on you know necessarily a junket profile we're looking to focus on the mass customer premium that's our that's our bread and butter that's who we are we want to go in the future and we believe we can build a business that keeps growing in the back of that more visitation and more penetration of china more ways of getting people to gamble and visit the cow is we're looking for you said this is another value add to me i think it's possible i know the the common wisdom is oh it's going to be terrible and i don't understand people think that way they It's not an immediate concern, nor I think it's a long-term concern. It might be a very positive thing for the cow market as it becomes more traditional, more integrated into China, and more consumer-friendly. It would be very positive for us.
spk12: Okay, great. That's great, Keller. Thanks, Rob. Appreciate it.
spk05: Our last question is from David Katz from Jefferies. Your line is open.
spk13: Hi. I appreciate you taking my question. Rob, you used the term voracious appetite for digital before, and I appreciate it and wondered what intelligence you have or what survey work that gives you a sense that your people, your customers here in the U.S. or you have an audience in the U.S., particularly in the context of Las Vegas going away, you know, that that audience is there for you.
spk08: Well, I think it's everybody. I guess the more voracious is the description of how we feel about that digital market. You look at it, you can't deny the cumulative power of all those different businesses. And I think we have to figure out which one we want to enter or which few we want to enter. I'm not that concerned about the fact that some people are too late for the party or we don't have a sports betting presence because I don't think it's all that – to enter them. If you want to buy something, you could. If you want to build a property, you could. But I think we're looking at right now, it's a good time to reflect on what's making money, what's going to grow. And I don't think it's necessarily in our thought process, just simply in the U.S. It may be outside in Europe. It would not be in Asia because you would not do something that would upset the government's business within Asia. But it could be in Europe. It could be in South America, North America. There's a lot of markets out there beyond the U.S. And it could be in the U.S. It could be B2B. It could be B2C. i just think the market we are spending a lot of time meeting and learning and with our with our balance sheet with the sale of Las Vegas, again, we have outsized capital to look at these things. When we build organically, we buy something that remains to be determined. We won't do something just to do something. It'll be something that's intelligent, well thought out, and profitable. And I think we all see, not just LDS, but you can see the opportunities there for a digital market that grows to 20, 30, 40, who knows what numbers. The numbers keep growing in people's minds. I think there is a belief that the digital market will become probably a huge opportunity for people like us, and we plan to be part of that. But, again, it's filling in for us. We're just learning the business. And I don't think it's a question of selling Las Vegas takes us off the table. In fact, I think the sale of Las Vegas puts us in the game even further because it provides the capital and the incentive to grow. At the same time, I think people have this either-or concept. Well, if you're land-based, you can't be digital. You have to be – we're not either. We're going to be a land-based player for years to come, making probably five-plus billion in Asia in the near future. We're going to be a digital player. And we'll still look at – there's some speculation we'll leave the U.S. market, which is absolutely untrue. We just felt it was a better place to earn more returns on capital than in Las Vegas. And we think we can be in multiple businesses. We can be digital, land-based, Asia, U.S., Where the opportunities go, that's where we'll go. And we're not tied to any one strategy or any one thought process.
spk13: Understood. Appreciate it. Thanks very much. Appreciate it. Thanks, David. Thanks.
spk05: Thank you, presenters. Everyone, that's all the time that we have for today. Thank you all for participating. You may now disconnect. Have a great day.
Disclaimer