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, managed by the private equity firm. 

On Wednesday, the Nevada Gaming Control Board (NGCB) authorized the payout, moving that suggestion to the Nevada Gaming Commission (NGC). The NGC will address the issue at its gathering 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 fact that it would not jeopardize 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 close of the previous month, Venetian possessed $830 million in cash, indicating that $280 million would remain if the $550 distribution is sanctioned. 

In March 2021, Las Vegas Sands (NYSE: LVS) declared the sale of the previously mentioned integrated resort and convention center properties to Apollo and VICI Properties (NYSE: VICI) for $6.25 billion. The large private equity firm spent $2.25 billion for the operating rights, whereas VICI invested $4 billion for the real estate. 

Apollo Demonstrating Strong Dedication to Venetian 

Since acquiring the Venetian, Apollo has improved the venue’s financial health while working to elevate its reputation in Las Vegas. For instance, the financial company distributed $11 million to 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 one of the most highly 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.”

Initiatives like these are vital, especially from a public relations perspective, as Apollo has a lengthy history in Las Vegas, and not every aspect of it is favorable. 

In 2008, Apollo and the private equity firm TPG Capital completed a huge $30 billion leveraged buyout of a former version of Caesars Entertainment. Nine years later, the financially troubled gaming company declared bankruptcy, and in 2019, Apollo and TPG divested their equity interests in the operator. 

Under Apollo, Venetian Prosperity 

Since February 2022, Apollo has invested $490 million at Venetian, which includes new restaurants and a new sportsbook and poker room. 

The operator plans to include an entertainment theater, add more restaurants, and enhance 4,000 rooms at Venetian and Palazzo by the end of next year. Those enhancements aren't straining the balance sheet, which is in excellent 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.”