Apollo Global Management is seeking approval from Nevada regulators for a $550 million distribution from the Venetian on the Las Vegas Strip, which is operated by the private equity firm. The Nevada Gaming Control Board (NGCB) approved the payout on Wednesday and is now referring the recommendation to the Nevada Gaming Commission (NGC), which will consider the matter in its upcoming meeting later this month. If the NGC approves, Apollo will distribute the Venetian cash to itself and its investors, an action that would not jeopardize the Venetian’s financial standing.
“We don’t need the $550 million to execute against the business plan,” Venetian CFO Robert Brimmer told the NGCB. “We have adequate liquidity and we have our capital source. With the money we have and cash flow we expect to generate, we’re able to invest this $1 billion over the next 18 months.” At the end of last month, the Venetian held $830 million in cash, so approving the $550 million payout would leave $280 million on hand.
In March 2021, Las Vegas Sands announced the sale of the Venetian integrated resort and convention center assets to Apollo and VICI Properties for $6.25 billion. Apollo paid $2.25 billion for the operating rights while VICI paid $4 billion for the real estate.
Since taking control of the Venetian, Apollo has significantly enhanced the venue’s financial and operational status. In December 2022, the firm distributed $11 million to 7,000 full-time and flex-time workers at the resort. Additionally, VICI recently announced it will provide $700 million in financing to Apollo as part of a $1 billion plan to upgrade the casino hotel.
“If you walk through the property, it is different than it was two years ago and we’re just getting going,” Brimmer told the NGCB. “We have $1 billion in our capital plan, of which we will deploy $900 million over the 2024-25 time period. The asset is in great shape, and once we finish our plan toward the end of 2025, we will be in the best condition in the last 25 years. The goal here is to create more compelling experiences for guests and create strong returns for our investors and more opportunities for our team members.”
This commitment is vital, especially from a public relations viewpoint, considering Apollo’s mixed history in Las Vegas. In 2008, Apollo and TPG Capital executed a $30 billion leveraged buyout of Caesars Entertainment. However, nine years later, the heavily indebted gaming company filed for bankruptcy; Apollo and TPG subsequently sold their equity stakes in Caesars in 2019.
Under Apollo’s management, the Venetian has thrived. Since February 2022, Apollo has invested $490 million in the Venetian, including opening new eateries, a sportsbook, and a poker room. The operator plans to add an entertainment theater, more restaurants, and upgrade 4,000 rooms at both the Venetian and Palazzo by the end of the next year without straining the balance sheet.
“We’re meeting budgets in the first half of the year and market trends continue to be very strong, as evidenced by the financial results the Strip released last week,” Brimmer told the NGCB. “The Venetian continues to grow market share.”
