Macau-based Sands China Ltd has announced that it has renewed its brand licensing agreement with its parent investor, Las Vegas Sands (LVS), for a period of 3 years, starting from January 2023. The agreement includes LVS granting Sands China a license to continue to use the LVS trademarks at a price of US $377 million.
The agreement is scheduled to last from January 1, 2023 to December 31, 2025.
Under the terms of the new International Trademark License Agreement, annual payments from Sands China are calculated based on a percentage of Sands China’s gaming (GGR) and non-gaming revenues and the total payment is 377 million US dollars, capped at 114 million US dollars for 2023, 125 million US dollars for 2024 and 138 million US dollars for 2025.
This new agreement comes after the end of the current Second Trademark Sub-License Agreement, which will be no longer valid from December 31, 2022.
In addition to Sands China, a number of its subsidiaries such as Venetian Cotai Ltd., the current Macau license holder Venetian Macau Ltd., Venetian Orient Ltd. and Cotai Strip Lot 2 Apart Hotel (Macau) Ltd., responsible for the management of the apartment-hotel tower at The Plaza Macao, will gain access to the LVS brands.
Furthermore, it “grants members of the Sands China group a license to use certain trademarks and service marks (a) in mainland China, Macau, Hong Kong and Taiwan for the design, development, construction, ownership, management and/or operation of casinos or gaming areas (including those casinos or gaming areas which form part of a hotel or an integrated resort) and other like facilities in which customers are able to gamble by playing games of fortune or chance or other similar games [in these regions] … and (b) in the rest of the world, for the marketing, advertising and promotion of our business.
Previous annual trademark payments:
In 2019, during pre-Covid-19 trading, Sands China and its subsidiaries paid 109.5 million US dollars for trademark licenses to LVS.
In 2020, when COVID-19 began, the company paid 21.7 million US dollars and for this current contract, which runs until December 31, it paid 16.4 million US dollars for the first nine months of 2022.
Spokeperson at Sands China, said: “In consideration for LVS granting our group the licence to use certain trademarks and service marks…, each licensee shall pay LVS an annual royalty at the rate of 1.5 percent of its gross non-gaming and gaming revenue.
“Gross revenue shall be calculated according to U.S. GAAP (Generally Accepted Accounting Principles) in effect as of January 1, 2023.
“The use of LVS trademarks is important to the success of the business of the Group since these licensed trademarks and service marks from an integral part of the Group’s corporate identity.”