Las Vegas Sands Probably Violated Foreign Corrupt Act

03-05-2013 - Las Vegas Sand Faces Bribery Allegations

Recent allegations have arisen concerning the business practices of American casinos and resorts in China, specifically, Macau. Of note is the Las Vegas Sands Corporation, which had a government probe initiated after a lawsuit from China CEO Steven Jacobs. His allegations stated that he did not want to conduct illegal activities for Las Vegas Sands,which led to his subsequent termination. The allegations go as far as directly pointing blame at Sheldon Adelson, CEO of Las Vegas Sands, for making the demands for bribery.

The auditing could prove fatal to the business of American casinos, as the majority of revenue for these companies is from Macau. “Casino revenue in Macau, the world’s largest gambling hub, rose 14 percent to $38 billion last year.” The revenue from Macau is even greater than Las Vegas and the overall profits of the Las Vegas Sands Corporation largely consists of revenue from Macau. Las Vegas Sands is not the only to suffer, however. Another company Wynn Resorts, who has faced allegations of bribery after donating millions to a local school in Macau. It has been argued that the actions are that of corporate responsibility. With all of these allegations of corruption, American business in Macau could soon be facing much stricter regulation.

In terms of the markets, investors don’t seem to be too deterred. Even though Las Vegas Sands stock prices dropped, there is no definitive action occurring or to what extent said actions will affect business, so a rise to normal prices is expected by some.

Source:

http://www.bloomberg.com/news/2013-03-04/las-vegas-sands-probably-violated-foreign-corrupt-act.html

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