Revenue

Revenue from contracts with customers primarily consists of casino wagers, room sales, food and beverage transactions, rental income from the Company’s mall tenants, convention sales and entertainment and ferry ticket sales. These contracts can be written, oral or implied by customary business practices.

Gross casino revenue is the aggregate of gaming wins and losses. The commissions rebated to junket operators and premium players for rolling play, cash discounts and other cash incentives to patrons related to gaming play are recorded as a reduction to gross casino revenue. Gaming contracts include a performance obligation to honor the patron’s wager and typically include a performance obligation to provide a product or service to the patron on a complimentary basis to incentivize gaming or in exchange for points earned under the Company’s loyalty programs.

For wagering contracts that include complimentary products and services provided by the Company to incentivize gaming, the Company allocates the relative stand-alone selling price of each product and service to the respective revenue type. Complimentary products or services provided under the Company's control and discretion, which are supplied by third parties, are recorded as an operating expense.

For wagering contracts that include products and services provided to a patron in exchange for points earned under the Company’s loyalty programs, the Company allocates the estimated stand-alone selling price of the points earned to the loyalty program liability. The loyalty program liability is a deferral of revenue until redemption occurs. Upon redemption of loyalty program points for Company-owned products and services, the stand-alone selling price of each product or service is allocated to the respective revenue type. For redemptions of points with third parties, the redemption amount is deducted from the loyalty program liability and paid directly to the third party. Any discounts received by the Company from the third party in connection with this transaction are recorded to other revenue.

After allocation to the other revenue types for products and services provided to patrons as part of a wagering contract, the residual amount is recorded to casino revenue as soon as the wager is settled. As all wagers have similar characteristics, the Company accounts for its gaming contracts collectively on a portfolio basis versus an individual basis.

Hotel revenue recognition criteria are met at the time of occupancy. Food and beverage revenue recognition criteria are met at the time of service. Convention revenues are recognized when the related service is rendered or the event is held. Deposits for future hotel occupancy, convention space or food and beverage services contracts are recorded as deferred income until the revenue recognition criteria are met. Cancellation fees for hotel, meeting space and food and beverage services are recognized upon cancellation by the customer and are included in other revenues. Ferry and entertainment revenue recognition criteria are met at the completion of the ferry trip or event, respectively. Revenue from contracts with a combination of these services is allocated pro rata based on each service’s relative stand-alone selling price.

Revenue from leases is primarily recorded to mall revenue and is generated from base rents and overage rents received through long-term leases with retail tenants. Base rent, adjusted for contractual escalations, is recognized on a straight-lined basis over the term of the related lease. Overage rent is paid by a tenant when its sales exceed an agreed upon minimum amount and is not recognized by the Company until the threshold is met.

Revenue Disaggregation

The Company operates Integrated Resorts internationally, in Macao and Singapore, and domestically, in Las Vegas and Pennsylvania. The Company generates revenues at its properties by providing the following types of products and services: gaming, rooms, food and beverage, mall and convention, retail and other. Revenue disaggregated by type of revenue and geographic location is as follows:



	Casino		Rooms		Food and Beverage		Mall		Convention, Retail and Other			Net Revenues
Three Months Ended June 30, 2018	(In millions)
Macao:
The Venetian Macao	$	677	$	52	$	18	$	56	$	27		$	830
Sands Cotai Central	386		78		23		15		7			509
The Parisian Macao	308		28		16		15		4			371
The Plaza Macao and Four Seasons Hotel Macao	136		10		7		33		—			186
Sands Macao	166		4		7		2		1			180
Ferry Operations and Other	—		—		—		—		42			42
	1,673		172		71		121		81			2,118
Marina Bay Sands	494		93		51		42		25			705
United States:
Las Vegas Operating Properties	60		149		91		—		102			402
Sands Bethlehem	119		4		6		1		6			136
	179		153		97		1		108			538
Intercompany eliminations⁽¹⁾	—		—		—		—		(58		)	(58		)
Total net revenues	$	2,346	$	418	$	219	$	164	$	156		$	3,303
Three Months Ended June 30, 2017
Macao:
The Venetian Macao	$	538	$	40	$	17	$	55	$	24		$	674
Sands Cotai Central	331		64		24		14		6			439
The Parisian Macao	285		31		15		17		5			353
The Plaza Macao and Four Seasons Hotel Macao	88		8		6		32		1			135
Sands Macao	144		5		6		—		1			156
Ferry Operations and Other	—		—		—		—		41			41
	1,386		148		68		118		78			1,798
Marina Bay Sands	651		80		41		40		22			834
United States:
Las Vegas Operating Properties	81		135		79		—		97			392
Sands Bethlehem	125		4		7		1		6			143
	206		139		86		1		103			535
Intercompany eliminations⁽¹⁾	—		—		—		—		(58		)	(58		)
Total net revenues	$	2,243	$	367	$	195	$	159	$	145		$	3,109



	Casino		Rooms		Food and Beverage		Mall		Convention, Retail and Other			Net Revenues
Six Months Ended June 30, 2018
Macao:
The Venetian Macao	$	1,393	$	109	$	41	$	109	$	46		$	1,698
Sands Cotai Central	804		160		52		29		13			1,058
The Parisian Macao	599		61		31		30		9			730
The Plaza Macao and Four Seasons Hotel Macao	278		19		15		64		1			377
Sands Macao	308		8		14		2		2			334
Ferry Operations and Other	—		—		—		—		81			81
	3,382		357		153		234		152			4,278
Marina Bay Sands	1,146		193		103		84		51			1,577
United States:
Las Vegas Operating Properties	180		305		179		—		215			879
Sands Bethlehem	237		8		12		2		11			270
	417		313		191		2		226			1,149
Intercompany eliminations⁽¹⁾	—		—		—		—		(122		)	(122		)
Total net revenues	$	4,945	$	863	$	447	$	320	$	307		$	6,882
Six Months Ended June 30, 2017
Macao:
The Venetian Macao	$	1,134	$	82	$	34	$	106	$	44		$	1,400
Sands Cotai Central	675		129		48		33		13			898
The Parisian Macao	528		60		31		34		10			663
The Plaza Macao and Four Seasons Hotel Macao	180		16		13		63		1			273
Sands Macao	308		10		13		—		3			334
Ferry Operations and Other	—		—		—		—		79			79
	2,825		297		139		236		150			3,647
Marina Bay Sands	1,143		174		84		78		45			1,524
United States:
Las Vegas Operating Properties	185		286		170		—		196			837
Sands Bethlehem	247		8		14		2		11			282
	432		294		184		2		207			1,119
Intercompany eliminations⁽¹⁾	—		—		—		—		(114		)	(114		)
Total net revenues	$	4,400	$	765	$	407	$	316	$	288		$	6,176

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(1)	Intercompany eliminations include royalties and other intercompany services (see "— Note 8 — Segment Information).

Contract and Contract Related Liabilities

The Company provides numerous products and services to its customers. There is often a timing difference between the cash payment by the customers and recognition of revenue for each of the associated performance obligations. The Company has the following main types of liabilities associated with contracts with customers: (1) outstanding chip liability, (2) loyalty program liability and (3) customer deposits and other deferred revenue for gaming and non-gaming products and services yet to be provided.

The outstanding chip liability represents the collective amounts owed to junket operators and patrons in exchange for gaming chips in their possession. Outstanding chips are expected to be recognized as revenue or redeemed for cash within one year of being purchased. The loyalty program liability represents a deferral of revenue until patron redemption of points earned. The loyalty program points are expected to be redeemed and recognized as revenue within one year of being earned. Customer deposits and other deferred revenue represent cash deposits made by customers for future services provided by the Company. With the exception of mall deposits, which are tied to the terms of the lease and typically extend beyond a year, the majority of these customer deposits and other deferred revenue are expected to be recognized as revenue or refunded to the customer within one year of the date the deposit was recorded.

The following table summarizes the liability activity related to contracts with customers:



	Outstanding Chip Liability				Loyalty Program Liability					Customer Deposits and Other Deferred Revenue⁽¹⁾
	2018		2017		2018		2017			2018		2017
	(In millions)
Balance at January 1	$	478	$	525	$	63	$	69		$	714	$	633
Balance at June 30	676		553		65		63			724		642
Increase (decrease)	$	198	$	28	$	2	$	(6	)	$	10	$	9

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(1)	Of this amount, $150 million, $145 million, $137 million and $131 million as of June 30, 2018, January 1, 2018, June 30, 2017, and January 1, 2017, respectively, relates to mall deposits that are accounted for based on lease terms usually greater than one year.

Significant Impacts of Adoption

The adoption of the change in accounting standards related to revenue from contracts with customers resulted in the following significant impacts: (1) promotional allowances line item was eliminated from the condensed consolidated statement of operations with the amount being deducted from casino revenue, (2) the valuation of points associated with the Company’s loyalty programs was changed from cost to fair value; the loyalty program expense, previously charged to casino expense, was deducted from casino revenue to defer revenue recognition until redemption of the loyalty program points occurs; and redemption of the loyalty program points at third parties is now deducted from the loyalty program liability and paid directly to the third party, with any discounts received from the third party recorded to other revenue, and (3) the portion of junket commissions that was previously recorded to casino expense is now deducted from casino revenue. These adjustments resulted in a decrease to net revenues and operating expenses of $32 million and $33 million, respectively, and an increase in operating income of $1 million for the three months ended June 30, 2017, and a decrease to net revenues and operating expenses of $71 million and $73 million, respectively, and an increase in operating income of $2 million for the six months ended June 30, 2017. The cumulative effect of the adoption was recognized as a decrease in retained earnings of $8 million on January 1, 2017.