Mar
30
LVS wants to build more Cotai Strips®
Filed Under Cotai, Las Vegas Sands
In his quest for global gaming domination, Sheldon Adelson discussed his desire to build more multi-billion dollar Cotai Strip® like casino destinations around the world, but with one caveat - it has to be on his terms of NO TAXES.
LVS’s argument to a potential hosting country would be that if LVS is risking an investment of $15-20 billion dollars, while creating hundreds of thousands of good paying jobs and bringing in millions of new tourists into the country, the arrangement would still be a big win-win for both parties.
What Mr. Adelson brings to the table - his success in Vegas, Macau and Singapore, plus global clout and billions - could be so compelling that I wouldnt be surprised if at least one country takes him up on his offer.
Here is the full article from the Las Vegas Review Journal. This one is well worth the read.
Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson said his company stands ready to take its Cotai Strip model of destination resort development into other emerging Asian gaming markets.
One caveat: Adelson wants the jurisdictions to cough up lucrative tax breaks, infrastructure construction and other concessions before the gaming company will spend $15 billion to $20 billion to replicate what it is building in Macau.
In a luncheon address Wednesday at the JPMorgan Chase & Co. investment conference that was held at the Las Vegas Sands-owned Venetian, Adelson said his company has conducted economic impact studies on emerging markets in Asia that are considering legalizing casinos.
The billionaire casino developer, now the world’s 12th richest person according to Forbes magazine, told the audience if a jurisdiction wants just a casino, Las Vegas Sands would spend “a couple hundred million to build a big box.”
He said the company was willing to spend billions on an integrated resort, which would include a casino, hotel rooms, retail areas, convention space, restaurants and other amenities, similar to the company’s planned $4 billion Marina Bay Sands in Singapore.
A string of integrated resorts, however, such as Macau’s Cotai Strip, will cost extra. Las Vegas Sands is spending $12 billion on the Cotai Strip to build 14 casinos with 20,000 hotel rooms, 3 million square feet of retail, 3 million square feet of convention space and dozens of restaurants.
Adelson, 74, told the audience an Asian destination wanting its own Cotai Strip should be willing to waive gaming taxes and other fees, build roads and other services, and offer Las Vegas Sands additional benefits.
“We would make the largest investment in that country’s history, which would bring in 8 (million) to 10 million incremental new tourists annually. That might be more than that country’s population,” Adelson said. “We’ll also create a couple of hundred thousand new jobs. That’s a very attractive proposition for any politician.”
Adelson said Las Vegas Sands has conducted economic impact studies on potential Asian gaming markets showing how an integrated resort could help that country’s tourism and consumer spending. He is traveling to several Asian destinations next week, but didn’t say where.
“With 20,000 hotel rooms, we would create 130,000 jobs at the low end and up to 180,000 jobs at the high end,” Adelson said. “We would move a country’s GDP (gross domestic product) needle by at least 2.7 percent. Instead of us going in and kissing anyone’s ring, they should look at the benefits we would offer.”
Adelson’s proposal intrigued both gaming analysts and rival casino operators.
Macquarie Capital gaming analyst Joel Simkins said a “desperate, Third World economy” might be willing to take Adelson up on the offer.
“Our view is that many Asian markets are underpenetrated, but there really isn’t nothing on the front burner,” Simkins said. “We’ve been hearing about Japan for what, 10 years? There has been discussion about South Korea and increased chatter coming from Vietnam, but these things have a long gestation period.”
Deutsche Bank gaming analyst Bill Lerner said companies like Las Vegas Sands have demonstrated a willingness to invest in foreign markets that has resulted in job growth and increased tourism.
“I think the history affords them the right to start demanding concessions in order to mitigate their risks,” Lerner said. “These companies have a track record of success.”
Wynn Resorts Ltd. Chairman Steve Wynn, who is expanding Wynn Macau and controls a 52-acre site on the Cotai Strip, said Las Vegas Sands’ success is worth noting.
“Obviously, Sheldon has something in mind, and I would need to have some more information,” said Wynn, who is often at odds with Adelson. “He has done a fabulous thing, and I admire him. We’ll see where he’s going with this.”
MGM Mirage Senior Vice President Alan Feldman, when asked about Adelson’s proposal, said the jurisdictions that accept Las Vegas Sands’ terms “might not be places where people would want to do business. But who wouldn’t want a jurisdiction to forgo gaming taxes?”
Note: Cotai Strip is a trademark of Las Vegas Sands Corp.Comments
4 Responses to “LVS wants to build more Cotai Strips®”
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This isn’t the right place for this but…
Last year you reported Stanley Ho’s empire was “crumbling” and I replied he was getting about the same revenue. The shift was mainly absorbed by increased revenue.
The February figures show 24% of market for SJM against 40% last year, 1% above LVS.
SJM are planning to demolish Hai Jalai to make way to build Oceanus in June and even demolish Hotel Lisboa. This could see SJM as a relatively small player in the future, at least for a couple of years.
I wonder what his strategy will be? Delay the reconstruction of Hotel Lisboa?
Of course Crowns meteoric rise to third place is said to be as a result of unsustainable junket commissions so it may take a tumble.
The discussion you mention is here. If i had to guess, he’s going to push forward with all of his growth projects. If he’s going to try and do an IPO, potential investors would likely want to know that he’s moving forward and not happy with the status quo. I’m not smart enough to know if that’s the right strategy or not, but I bet thats what investors would want to hear. I also dont know if he has the capital to build everything on his plate, and given the state of the capital markets, raising capital (especially debt capital) could be challening. Or maybe he has his own financing for his projects, like I said, I dont know. Regarding Crown, I can wait to see what their profits will look like given all the press on their junket discounting. Check a few comments ago where one reader is asking how profitable mpel could be given their junket commissions. Should be interesting.
The last report I read had him as having about 56 billion HKD “in the bank”. The quote said “More than the Macau Treasury” if you can believe it.
Tim
I would like to talk to you in some depth on the international gaming business. You can reach me at Tysiera@gmail.com
Also if the editor is available I would like to also discuss some opportunities in Macau