By Kate O'Keeffe
HONG KONG--The world's largest casino operator is losing its
leader in Macau amid the worst-ever downturn in the once-booming
Chinese gambling hub, which has been hammered by Beijing's
crackdown on corruption.
The Macau unit of Las Vegas Sands Corp. said in a statement
Friday that its chief executive, Ed Tracy, has decided to retire
effective March 6.
Mr. Tracy has no disagreement with the board and will be a
consultant to the company after stepping down, according to the
statement from the Hong Kong-listed unit Sands China Ltd.
The 62-year-old executive, who joined the casino operator in
2010 and was appointed chief executive in July 2011, said in a
Friday letter to staff reviewed by The Wall Street Journal that he
and his wife are returning to the U.S. to focus on family and
health.
With the opening of The Parisian, Sands' fifth casino in Macau,
still more than a year away, "the best management team in Macao
already in place and several other important objectives already
achieved, this seemed like the right point in time to announce my
retirement," said Mr. Tracy in the letter. He didn't immediately
reply to a request for comment.
Las Vegas Sands chairman Sheldon Adelson praised and thanked Mr.
Tracy in a statement provided by the company's spokesman. As the
company looks for a replacement, "we remain deeply committed to the
future of Macao and the more than 28,000 team members there who are
a part of the Sands family," said Mr. Adelson in the statement.
Shares of Sands China were down 3.0% at HK$36.95 in Hong Kong
trading, but outperformed peers like SJM Holdings Ltd. and Galaxy
Entertainment Ltd., which both finished more than 4% lower.
The announcement of Mr. Tracy's retirement comes amid a
seven-month losing streak in Macau, which last year recorded its
first annual decline in gambling revenue since data became
available in 2002.
Executives and analysts attribute the sharp reversal of fortunes
in Macau, which rakes in seven times more gambling revenue than the
Las Vegas Strip, primarily to China's crackdown on corruption. In
addition to bringing down many top mainland officials, the sweeping
campaign has led high rollers to shy away from Macau's baccarat
tables, they say.
It is unclear when the situation in Macau might improve as the
campaign hasn't shown any signs of letting up. Local police
Saturday arrested six people--including the nephew of the founder
of one of the Chinese territory's casino operators--on suspicion of
running a major prostitution ring, according to a police statement
and a person familiar with the matter. The move against a member of
such a powerful family was interpreted by some executives in Macau
as a sign that no one is untouchable in the crackdown.
This week, analysts also cited concerns about a major junket
operator closing down many of its operations. Junket operators, who
recruit wealthy gamblers in China, lend them money to bet in Macau,
and later handle debt collection, have been particularly hard-hit
in recent months. Hong Kong has launched a money-laundering
investigation into one of Macau's top junket figures and frozen his
assets, The Wall Street Journal reported in December. Some junket
and casino executives believe the case is connected to Beijing's
closer scrutiny.
Mr. Tracy's resignation is the latest in a string of recent
departures of Sands' top executives. Mike Leven retired at the end
of the year after serving as president and chief operating officer
of the Las Vegas company since 2009. The Macau unit's general
counsel is set to retire in April, and its No. 2 executive left in
September 2013 and hasn't been replaced.
Mr. Tracy joined Sands weeks after the company fired its
previous Macau chief executive, Steve Jacobs, in July 2010. Sands
says the former executive spawned U.S. bribery investigations into
its operations with his subsequent wrongful termination lawsuit.
The company has denied the claims in Mr. Jacobs' ongoing suit and
said it is cooperating with federal investigators.
Anjie Zheng
contributed this article.
Write to Kate O'Keeffe at Kathryn.OKeeffe@wsj.com
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