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\n\tMr. Hypocrite, Sands Chairman Sheldon Adelson<\/p>\n
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\n\tMr. Hypocrite, Sands Chairman Sheldon Adelson<\/p>\n
\n\tBy HOWARD STUTZ
\n\tLAS VEGAS REVIEW-JOURNAL
\n\tLas Vegas Sands Corp. canceled plans for a $30 billion resort and gaming complex in Madrid Friday, saying the so-called EuroVegas development was no longer in the best interests of the company\u2019s shareholders.<\/p>\n
\tIn a statement, Las Vegas Sands said it would focus on development opportunities in Asia. The company, which operates the Venetian and Palazzo resorts on the Strip, collects roughly 80 percent of its annual revenues and cash flows from its hotel-casinos in Macau and Singapore.<\/p>\n
\tLas Vegas Sands Chairman Sheldon Adelson said the company\u2019s internal development process dictated the outcome for Spain, which was to include 12 hotels, six casinos, a convention center, golf courses, theaters, shopping malls, bars and restaurants.<\/p>\n
\t\u201cThat process has been extremely thorough and while the government and many others have worked diligently on this effort, we do not see a path in which the criteria needed to move forward with this large-scale development can be reached,\u201d Adelson said.<\/p>\n
\tThe Spanish government viewed the development as an economic development effort that could create more than 260,000 jobs.<\/p>\n
\tIn recent months, however, the project had picked up opposition from various groups, including those not wanting to see the country\u2019s anti-smoking laws reduced in favor of the casinos.<\/p>\n
\t\u201cIt was becoming more apparent that the Spanish government could not meet all the conditions that Las Vegas Sands had requested, and we would have viewed a decision to go forward without these conditions as a negative,\u201d RBC Capital Markets gaming analyst John Kempf told investors.<\/p>\n
\tSpain\u2019s Deputy Prime Minister Soraya Saenz de Santamaria told the Associated Press that Las Vegas Sands made late demands for legal and financial guarantees that \u201cdid not comply with Spanish law or that of the European Union.\u201d<\/p>\n
\tShe told the wire service the demands included tax benefits, financial compensation in the event of any future law change that could affect the project, and an assurance that new operators would be not be allowed in the sector.<\/p>\n
\tAdelson said he envisioned developing integrated resorts in Europe for the past nine years, but the company\u2019s efforts need to be trained on Asia.<\/p>\n
\t\u201cRight now our focus is on encouraging Asian countries, like Japan and Korea, to dramatically enhance their tourism offering through the development of integrated resorts there,\u201d Adelson said.<\/p>\n
\tDeutsche Bank gaming analyst Carlo Santarelli said the news shouldn\u2019t come as a surprise to the company\u2019s investors. The project was first announced in September 2011 but not much progress was made over the past two years. Most of the focus had been where to place EuroVegas, in either Madrid or Barcelona.<\/p>\n
\t\u201cWhile a formal announcement that the project is no longer under consideration may come as a modest surprise to some, we think the ultimate decision to shelf the development was expected by most as Spain had drifted to the periphery as Japan has come more into focus,\u201d Santarelli wrote in a research note.<\/p>\n
\tStifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said casino potential in Japan would be a far more lucrative return on investment for Las Vegas Sands, than any opportunity in Spain.<\/p>\n
\t\u201cGiven the recent early-stage efforts to introduce formalized gaming legislation in Japan, we sense today\u2019s announcement may have been driven by the greater sense of certainty around a potential Japanese opportunity and management\u2019s interest in keeping powder dry in an effort to enhance its stature through what will likely be a fiercely competitive bidding process,\u201d Wieczynski said.<\/p>\n