Sands Storm: Las Vegas Giant in Trouble

Nov. 10, 2008— -- The latest sign that Las Vegas bets are buckling under the tough economy? One of the strip's marquee casino operators is on the ropes.

Las Vegas Sands Corp., the owner of the Venetian Hotel and Casino, has warned in a filing with the Securities and Exchange Commission that if it can't raise the money it needs to meet certain debt agreements, it could "raise a substantial doubt about our ability to continue as a going concern" -- or, in other words, to keep doing business.

A Sands spokesman declined to comment, noting that the company would be releasing its financial quarterly results soon. Sands has not set an official date for the release.

In a statement to the press last month, the company said that it was working with an investment banking firm on a plan to raise more money.

The pain in the casino industry has been widespread, as would-be gamblers tighten their belts and stay home instead of hitting the slots. Gaming revenue is down sharply, and so are stock prices: Sands has seen its share value plummet in the last 12 months, from a high above $120 to just over $7 by the close of trading on Friday.

Likewise, shares of MGM Mirage were trading above $90 last October but have since fallen to just above $12. Trump Entertainment Resorts, which last week posted $139.1 million third-quarter loss, saw its share values plunge from above $8 last November to below 60 cents on Friday.

But Sands, said research analyst Amit Kapoor, is the only major casino company that has reported that it is in danger of breaking its debt agreements, which require that the company have a certain amount of cash in proportion to its outstanding loans.

Kapoor, who works for Gabelli and Company -- the brokerage arm of GAMCO Investors, which owns stock in Sands -- said that a Sands bankruptcy was unlikely.

"This is a post-Halloween market and people like to think of scary things," he said, "but I think the prospect of bankruptcy is a scary but a highly improbable event."

If Sands can't raise the money it needs, he said, the company may seek to sell assets such as casino properties.