The Venetian Resort’s owner, private equity investment company Apollo Global Management, plans to distribute a dividend of an estimated $620 million to investors and hand out bonuses to the resort’s 7,000 employees.
The Nevada Gaming Control Board recommended Wednesday the approval of this move, which is required by regulation due to the fact that the operating subsidiary of Apollo is privately held. The Nevada Gaming Commission is expected to consider the request on November 17.
Representatives of The Venetian did not specify the amount of bonuses workers will receive, as it will be announced in an employee town hall meeting. However, they did say that each employee would receive the same amount, Las Vegas Review-Journal reported.
The Control Board was required to review the distribution to be sure the company maintains an appropriate debt balance and financial stability of its operation.
Chief financial officer of The Venetian, Robert Brimmer, stated the resort has substantially outperformed expectations since Apollo acquired the property for $6.4 billion from Las Vegas Sands Corp. in February. The deal was first announced in March 2021.
He also said the company has had “higher-than-expected” financial results in the hotel, casino, food and beverage, and meeting and convention business. It managed to maintain high room and occupancy rates since the Apollo team took over.
According to the CFO, the company intends to invest $1 billion in the property in the next three to four years by remodeling rooms and expanding and upgrading the casino floor with more slot machines. The investment would represent one of the most significant updates to a Strip venue in years.
Control Board members stated they were concerned about The Venetian’s financial stability because Apollo “has not had a long track record operating the company.” Apollo’s private equity partner Daniel Cohen said the company did not anticipate such a large rebound from the pandemic, and realized higher profitability after leaders got more familiar with the operations.
Cohen said that when the transaction was signed in March 2021, the company was underwriting the transaction “at a very different point of time in history,” reports Review-Journal. “When we closed the transaction, we were in recovery, but we didn’t know the business,” he noted. “We didn’t even know what the business plan was and it took us three or four months to figure that out.”
