Apollo Global Management (NYSE: APO) is seeking approval from Nevada regulators for a $550 million distribution from the Venetian located on the Las Vegas Strip, which is managed by the private equity company. 

On Wednesday, the Nevada Gaming Control Board (NGCB) endorsed the payout, forwarding that suggestion to the Nevada Gaming Commission (NGC). The NGC will address the issue during its meeting later this month. 

If the NGC approves the distribution, Apollo will allocate the Venetian cash to itself and its investors. Possibly strengthening the argument for the NGC to approve the action is the notion that it would not threaten Venetian’s financial standing.

"We don’t need the $550 million to execute against the business plan,” Venetian CFO Robert Brimmer told the NGCB. “We have adequate liquidity and we have our capital source. With the money we have and cash flow we expect to generate, we’re able to invest this $1 billion over the next 18 months.”

At the end of the previous month, Venetian held $830 million in cash, indicating that $280 million would remain if the $550 distribution is authorized. 

In March 2021, Las Vegas Sands (NYSE: LVS) revealed the sale of the mentioned integrated resort and convention center properties to Apollo and VICI Properties (NYSE: VICI) for $6.25 billion. The private equity behemoth acquired the operating rights for $2.25 billion, while VICI spent $4 billion on the real estate. 

Apollo Demonstrating Strong Dedication to Venetian 

Since gaining control of the Venetian, Apollo has improved the establishment’s financial position while also working to elevate its reputation in Las Vegas. For instance, the financial company distributed $11 million among 7,000 full-time and part-time employees at the integrated resort in December 2022. 

Recently, VICI revealed it will provide $700 million in financing to Apollo as part of the private equity firm’s $1 billion initiative to improve what is already one of the top-rated casino hotels on the Strip. 

“If you walk through the property, it is different than it was two years ago and we’re just getting going. We have $1 billion in our capital plan, of which we will deploy $900 million over the 2024-25 time period,” Brimmer told the NGCB. “The asset is in great shape, and once we finish our plan toward the end of 2025, we will be in the best condition in the last 25 years. The goal here is to create more compelling experiences for guests and create strong returns for our investors and more opportunities for our team members.”

Actions like these are vital, especially from a public relations perspective, as Apollo has an extensive history in Las Vegas, and not all of it is favorable. 

In 2008, Apollo and the private equity firm TPG Capital completed a substantial $30 billion leveraged buyout of an earlier version of Caesars Entertainment. Nine years later, the financially burdened gaming firm declared bankruptcy, and in 2019, Apollo and TPG divested their equity shares in the company. 

Under Apollo, Venetian Prosperity 

Since February 2022, Apollo has invested $490 million at Venetian, which includes new dining places along with a new sportsbook and poker area. 

The operator plans to include an entertainment theater, additional restaurants, and upgrade 4,000 rooms at Venetian and Palazzo by the end of next year. Those enhancements aren’t putting pressure on the balance sheet, which is in robust condition. 

“We’re meeting budgets in the first half of the year and market trends continue to be very strong, as evidenced by the financial results the Strip released last week,” Brimmer said at the NGCB meet. “The Venetian continues to grow market share.”