The plaintiff claims Las Vegas Sands stole his ideas for Macau development after backing out of a joint venture.
Las Vegas Sands Corporation, Sheldon Adelson, and 2 Sands executives are facing a lawsuit in U.S. District Court involving a 13-year old Macau development deal.
The Sands is being sued for $5 billion according to many different online sources, though the number was reported as $375 million (3 billion patacas) by the New York Times: Dealbook when the suit was filed. After a recent court decision in Macau, the US lawsuit is set to proceed.
Shi Sheng Hao’s Lawsuit
The suit is nothing new for Sheldon Adelson and his exectutives. It was filed 2 years ago in the U.S. District Court by Shi Sheng Hao, who is referred to as Marshall Hao in the English-speaking countries. Marshall Hao and his company, Asian American Entertainment (AAE), filed the lawsuit based on a development deal gone bad in 2003.
At the time, Sheldon Adelson and Las Vegas Sands Corp were in a partnership with Mr. Hao and Asian American Entertainment. The two sides were in a joint venture to secure a casino concession in Macau. The two were preparing a joint bid for Macau officials when Sands Corporation terminated the joint venture.
Galaxy Corporation Partnership
Instead, Las Vegas Sands entered into a joint bid with Galaxy Corporation, a rival of AAE’s. Together, the two won a concession to build integrated casino-resorts in Macau. Sheldon Adelson built the Venetian Macau and the Sands Macau, which went on to become the richest casino properties in the world.
The land deal took Sheldon Adelson from his role as a respectable, yet secondary, gaming executive to the richest casino mogul in the world — actually, in the history of the world. At the peak of his financial success, Sheldon Adelson had somewhere between $38 billion and $39 billion and was listed as the 8th-richest person on the planet.
Asian American Lawsuit
Asian American Entertainment claims Sheldon Adelson’s corporation took proprietary details from their joint bid and used them in its joint proposal with Galaxy Corporation. In doing so, Shi Sheng Hao claims the gaming mogul and his corporation reaped a windfall which is owed to AAE. They are asking for 70% of the profits for Sands China Ltd., the Asian division of Sands Corp, for the years 2004 to 2022.
Analysts are not sure what to estimate the profits for Sands China in those years. Some put the figure at $5 billion. Reuters placed the figure closer to $8 billion. Whatever the case, it is a huge sum of money.
Macau Ruling on Hao Case
The lawsuit might be dismissed out-of-hand, except a Macau court ruled in Shi Sheng Hao’s favor last month. The court suggested Mr. Hao should proceed with his lawsuit in the United States.
It is a long way from the huge settlement AAE and Hao want, but it is a victory of sorts. Las Vegas Sands has employed legal tactics in China and the United States in order to forestall the legal proceedings. LVS has a great deal more clout in the United States — where US laws tend to support Las Vegas casino companies — but it places the world’s largest casino company in some amount of legal jeopardy.
For its part, Las Vegas Sands maintains that Hao’s lawsuit is frivolous. Las Vegas Sands released a statement on the Macau legal decision, saying LVS “has consistently maintained that this case has no merit. We have confidence that ultimately the Macao judicial process will reach the same conclusion.”
Richard Suen Lawsuit
This is not the first Chinese businessman who filed a suit against Las Vegas Sands, claiming to have masterminded the behind-the-scenes dealings which got the company its Macau gaming license. Richard Suen, a Hong Kong businessman, claims he was the one who tipped off Las Vegas Sands about the potential of Macau as a gaming hub back in the early 2000s.
Not only that, but Richard Suen claimed in a Nevada court that he was promised $5 million and 2% of the casino company’s profits for helping LVS obtain a gaming license. In 2013, Suen convinced a Las Vegas court to award him $70 million.
Recently, Las Vegas Sands won an appeal of that 2013 decision, with the Nevada Supreme Court ruling that LVS did not have to pay $70 million. The high court ordered a retrial.
Steve Jacobs Lawsuit
Sheldon Adelson’s corporation is in the middle of a much more well-known lawsuit, which was brought by former Sands China CEO Steve Jacobs. Steve Jacobs claims he was wrongfully terminated because he refused to involve himself in questionable behavior while serving as Sands China’s CEO. Charges of bribery and corruption are at the heart of the Jacobs lawsuit.
That trial is set to begin in June 2016, though Sheldon Adelson’s lawyers have tried to get the judge to delay the beginning of the trial. In fact, the lawyers have called for the judge to be removed from the case — a classic legal stalling tactic. If ever the trial begins, the judge has ordered Sheldon Adelson to give up to 48 hours of testimony.
