There are many people who claim that the Las Vegas Sands Corp. is a great investment, and one of the finest gambling destinations on the planet. And why shouldn’t it be? After all, they own the largest casino on the strip and it attracts some of the biggest names in entertainment as well. But I don’t buy their claim that Las Vegas is a great place to go if my money was at stake.
The truth is that the Las Vegas Sands Corp controls just 22 percent of the Las Vegas Sands Hotel and Casino property. The rest is owned by local municipalities and private investors. Many of the slot machines at the resorts are financed by outside sources, such as Mango Movers and Shippers, which guarantee low-risk financing because they are not considered “high-risk” by the casino. Because the casino pays the taxes on the property it also pays most of the maintenance and operation costs. So basically, the casino is the one who owns the money instead of the local municipalities.
The money they keep is invested in either the hotels or the general operations of the casino itself, so theoretically, there should be some left over after paying all the taxes, electricity, heating, security, etc. But if you look out your window from any of the slots on the riverboat casinos across the street you’ll see that most of the money stays in the building. And most of the money is invested in gaming machines instead of in the gaming floor or in the mechanical parts of the casino buildings themselves. If you walk down any of the casino floors, you will find that most of the money is used to increase the stock of “puppy food” that is sold to customers who come to play the slots. The casino is not concerned about whether the people who work in the restaurants deliver the food according to the guests’ orders; they just want to turn a profit.
Class III gambling enterprises are those where the bulk of the funds for the operation and development of the casino are raised, usually through loans and capitalization. This type of casino is managed by individual members or corporations, and their income is obtained by the operation of slot machines and other gaming devices. The income of this class of establishments is not secured by the income of the casino itself, but the individual members may use the funds generated in the casinos for personal purposes such as traveling, advertising, etc. This class of casino is considered to be relatively transparent, and there is generally less controversy as to the definition of its operation and ownership.
Class IV, V, and VI are the most highly risk gambling establishments, and they do not typically require a license to operate. This means they do not have to follow the same reporting and record keeping requirements as the larger casino market.